J  S 

LQ3Q 

A  /3     ative  Document  (1982) 


No.  107 


STATE  OF)  NEW  YORK 

LaM«M^HM«M*WMW» 


IC-NRLF 


REPORTS 


OF  THE 


M7    3M7 


New  York  State  Joint  Legislative 
Committee  to  Investigate  the 
Affairs  of  the  City  of  New  York 


1921-1922 


ALB  AsN  Y 

J.  B.  LYON  COMPANY,  PRINTERS 
1922 


DOCUMENT* 


Legislative  Document  (1922)  No.  107 


STATE  OF  NEW  YORK 


REPORTS 


OF   THE 


New  York  State  Joint  Legislative 
Committee  to  Investigate  the 
Affairs  of  the  City  of  New  York 

1921-1922 


ALBANY 

J.  B.  LYON  COMPANY,  PRINTERS 
1922 


•H  ,'•        *J  1  !.;i;  : 


I  C 


THE  COMMITTEE 


SCHUYLER  M.  MEYER,  Chairman. 

SIMON  L.  ABLER,   Vice-Chairman. 

THEODORE  DOUGLAS  ROBINSON,  Secretary. 
MAXWELL  S.  HARRIS,  THEODORE  STITT, 

FREDERICK  KAVANAUGH,  WALTER  W.  WESTALL, 

BERNARD  DOWNING,  CHARLES  D.  DONOHUE, 

SOL  ULLMAN,  MAURICE  BLOCH, 

JOHN  R.  YALE,  PETER  J.  McARDLE, 

CLAYTON  R.  LUSK,  Ex-officio. 
JAMES  J.  WALKER,  Ex-officio. 


ELON  R.  BROWN,  Counsel. 
LEONARD  M.  WALLSTEIN,  Associate  Counsel. 
SAMUEL  A.  BERGER,  Associate  Counsel. 
ALEXANDER  OTIS,  Associate  Counsel. 
FRANK  LORD,  Associate  Counsel. 
PERRINE  &  NICHOLS,  Accountants. 
SPENCER  PHENIX,  Special  Assistant. 
A.  D.  H.  SMITH,  Special  Assistant. 

In  charge  of  the  field  work  of  various  phases  of  the  investiga- 
tion were: 

FREDERICK  RIPPON,  WILLIAM  BULLOCK, 

CLARENCE  KING,  MAURICE  DEUTSCH, 

PAUL  C.  WILSON,  WINTHROP  D.  LANE, 

LEO  J.  MCDERMOTT,  JULIAN  I.  MASKS, 

[Hi] 


596306 


JOINT  RESOLUTION  CONSTITUTING  THE  NEW  YORK 
STATE  JOINT  LEGISLATIVE  COMMITTEE  TO  IN- 
VESTIGATE THE  AFFAIRS  OF  THE  CITY  OF  NEW 
YORK 

ADOPTED  APRIL  15,  1921. 

WHEREAS,  It  is  the  common  report  that  the  revenue  of  the 
City  of  New  York  is  insufficient  to  meet  the  requirements  of  the 
public  schools  and  other  municipal  departments,  and  the  general 
financial  status  and  the  credit  of  the  city  are  in  a  perilous 
position;  and 

WHEREAS,  It  is  the  common  report  that  such  financial  condition 
of  the  city  is  due,  in  part,  to  inefficiency,  waste  and  corruption 
in  various  departments  of  the  city  government,  and 

WHEREAS,  It  is  also  the  common  report  that  the  personnel  and 
the  current  administration  of  various  departments  of  the  govern- 
ment of  the  city  has  been  demoralized  and  subjected  to  practices 
prejudicial  to  the  public  interest;  and 

WHEREAS,  It  has  been  repeatedly  stated  in  public  reports  and 
as  matters  of  public  information  that  the  financial  difficulties  of 
the  said  city,  and  the  inefficiency  and  waste  in  the  administration 
of  its  government  are  due,  in  part,  to  duplication  and  defects  in 
the  structure  of  its  government  under  existing  laws,  and 

WHEREAS,  There  is  and  for  a  long  time  has  been  an  insistent 
and  widespread  demand  by  citizens  of  such  city  that  the  legis- 
lature inquire  into  all  such  matters  for  the  purpose  of  enabling 
the  legislature  to  correct  such  abuses,  cure  defects  and  afford 
relief  to  such  city  so  far  as  the  same  may  be  done  by  law,  and 

WHEREAS,  It  is  the  duty  and  function  of  the  state  to  lend  such 
assistance  as  it  can  to  secure  to  such  city  and  its  citizens  residing 
therein  honest,  efficient  and  economical  local  government;  now, 
therefore  be  it 

Resolved  (if  the  Assembly  concur),  That  a  joint  legislative 
committee  is  hereby  constituted,  to  consist  of  five  members  of  the 
senate  to  be  appointed  by  the  temporary  president  of  the  senate 
and  six  members  of  the  assembly  to  be  appointed  by  the  speaker 
of  the  assembly,  with  power  and  authority  to  investigate  the 
general  financial  condition  of  the  city  of  New  York,  the  causes 

[v] 


vi  JOINT  RESOLUTION 

thereof,  and  the  remedies  therefor,  and  to  inquire  and  examine 
into  all  and  singular  the  aforesaid  matters  and  allegations,  and 
to  inquire  into  the  accounts,  the  structure  and  the  methods  and 
manner  of  administration  of  any  and  all  the  departments,  bureaus, 
offices,  boards  and  commissions  of  the  government  of  the  city  of 
New  York,  and  of  the  boroughs  thereof,  and  of  the  counties 
geographically  included  within  said  city  and  into  every  matter 
and  thing  that  affects  or  has  affected  the  present,  past  or  future 
conditions  surrounding  or  in  any  way  bearing  upon  or  relating  to 
the  financial  condition  of  said  city,  the  structure  and  the  admin- 
istration of  the  municipal  government  thereof,  and  of  the  govern- 
ment of  the  counties  geographically  included  within  said  city. 
The  investigation  of  the  committee  may  include  every  other  mat- 
ter and  thing  not  specifically  mentioned  in  this  resolution  relevant 
to  the  general  question  of  ascertaining  and  improving  the  financial 
conditions  of  said  city  and  the  structure  and  the  administration 
of  the  government  thereof,  and  of  the  counties  geographically 
included  therein,  as  though  the  same  had  been  expressly  specified 
therein. 

Further  resolved.  That  such  committee  be  hereby  authorized 
to  sit  in  the  city  of  New  York,  or  elsewhere  within  the  state,  and 
conduct  the  investigation  herein  described  during  the  session  of 
the  legislature  and  during  the  recess  or  after  the  adjournment 
with  the  same  power  and  authority  it  would  have  were  the  legis- 
lature in  session  to  choose  a  chairman  from  among  its  own  mem- 
bers, to  employ  a  secretary,  counsel,  accountants  and  such  other 
assistants  as  may  be  needed,  to  take  testimony,  subpoena  witnesses 
and  compel  the  production  of  books,  documents  and  papers,  to 
have  the  assistance  and  cooperation  of  the  officers  and  employees 
of  the  city  of  New  York  and  of  the  counties  included  geographic- 
ally within  said  city  and  access  to  and  examination  of  all  records, 
books,  papers  and  documents  of  said  city  and  counties  and  of 
any  and  all  departments,  bureaus,  offices,  boards  or  commissions 
thereof,  and  otherwise  to  have  all  the  powers  of  a  legislative 
committee.  The  committee  may  at  any  time  and  from  time  to 
time  by  resolution  of  a  majority  of  its  members,  be  subdivided  into 
sub-committees  of  such  number  as  it  may  by  majority  determine, 
which  sub-committees  may  sit  at  the  same  time  and  place  or  at 
different  times  and  places  in  the  state  of  !N"ew  York  during  the 
session  of  the  legislature,  during  its  recess  or  after  the  adjourn- 
ment, each  such  sub-committee  to  appoint  its  own  chairman  and 


JOINT  RESOLUTION  vii 

to  act  by  majority  vote  of  its  own  members  and  to  administer 
oaths  and  to  issue  subpoenas  requiring  the  attendance  of  witnesses 
and  the  production  of  books,  papers  and  documents  and  to  do  all 
other  acts  and  things  that  may  be  done  by  the  committee  as  a 
whole  or  that  may  be  delegated  to  it  by  the  full  committee. 

Further  resolved,  Whenever  in  its  judgment  the  public  interest 
demands,  the  committee  may  determine  that  a  person  shall  not 
be  excused  from  attending  and  testifying  before  said  committee 
or  before  any  sub-committee  thereof,  or  from  producing  books, 
papers  or  documents  before  the  committee  or  such  sub-committee 
in  obedience  to  its  subpoena  on  the  ground  that  the  testimony  or 
evidence,  documentary  or  otherwise,  required  of  him  may  tend 
to  incriminate  him  or  to  subject  him  to  a  penalty  or  forfeiture; 
but  no  person  so  attending  and  testifying  or  producing  such 
books,  papers  or  documents,  who  has  duly  claimed  excuse  or 
privilege  which  would  be  sufficient  except  for  this  provision  of 
this  resolution  and  which  said  excuse  or  privilege  has  been 
expressly  denied  by  the  committee,  shall  be  subjected  to  prosecu- 
tion or  to  any  penalty  or  forfeiture  for  01  on  account  of  the 
transaction,  matter  or  thing  concerning  which  he  may  as  afore- 
said testify  or  produce  evidence,  documentary  or  otherwise,  before 
said  committee  or  sub-committee  in  obedience  to  its  subpoena. 

Further  resolved,  That  said  committee  shall  report  with  all 
convenient  speed,  but  not  later  than  February  1,  1922,  the  results 
of  its  investigations  to  the  legislature;  and  that  such  committee 
shall  also  report,  from  time  to  time,  such  results  of  its  investi- 
gations as  relate  to  or  bear  upon  the  finances  and  the  structure 
of  the  government  of  the  city  of  New  York,  and  the  counties 
geographically  included  therein,  to  any  commission  now  or  here- 
after created  by  law  for  the  study  and  general  revision  of  the) 
Greater  New  York  charter,  and  the  acts  amendatory  thereof  or 
supplemental  thereto,  or  other  acts  relating  to  the  government  of 
said  city. 

Further  resolved,  That  the  sum  of  one  hundred  thousand  dol- 
lars ($100,000),  or  so  much  thereof  as  may  be  necessary,  is  hereby 
appropriated  from  and  out  of  the  contingent  fund  of  the  legisla- 
ture for  the  necessary  expenses  of  said  committee  and  to  be  paid 
on  vouchers  approved  and  audited  according  to  law. 


CONTENTS 


FIRST  REPORT  PAGE 

First  Report  of  Joint  Legislative  Committee 3 

I.  Financial    5 

II.  Division  of  Authority  between  the  City  and  the  Legislature .  .  6 

III.  Adherence  to   Precedents 7 

IV.  Limit  of  Delegation  of  State  Authority  to  the  City 8 

Minority  Report   10 


SECOND  REPORT 

Report  on  the  Department  of  Docks 13 

Profiteering    in    Wharfage 15 

Losses  on  Long  Term  Leases 17 

Losses  on  Staten  Island  Piers 18 

Lack   of   Zoning  and   Warehouses 19 

City  Wastes  its  Property 20 

Unsound    Dock    Finances 21 

Excessive  Cost  of  Policing  Docks 22 

The  Port  a  Matter  of  State  and  National  Concern 23 

Growth  of  Port 24 

Recommendations1 24 

Exhibit    "A,"    Assessed    Value    and    Gross    Revenues    of    the    Dock 

Department  Properties,  1920,  by  Borough  and  District  Segregation.  27 

Group  I,  North  River,  Battery  to  Fifty-ninth  Street 27 

Group  II,  East  River,  Battery  to  Fifty-ninth  Street,  Manhattan ...  28 
Exhibit   "B,"    Table    Showing   Rates    of   Wharfage    Charged    by   24 

Lessees  of  City-owned  Piers,  Compared  with  Berth  Space  Leased.  .  29 
Exhibit  "  C,"  Table  Showing  Rates  of  Wharfage  Charged  by  Steve- 
dores and  Intermediaries  for  Public  Pier  Wharfage,  for  which  the 

City  Received  Prescribed  Rates,  as  Shown 29 


THIRD  REPORT 
Report  and  Recommendation  on  the  Board  of  Education 33 

A.  Inadequate    School   Accommodations 33 

B.  Fire  Hazards    •  • 34 

C.  Negligent    Administration    35 

Unsound    Legislation    •  • 36 

1.  Complicated    and    Antiquated    Provisions    of    Law    Requiring   the 

Co-operation  of  Many  Other  Branches  of  the  City  Government 
in  Building  Operations  with  Resulting  Delays,  Often  Amounting 
to  a  Veto  of  a  Building  Project 37 

2.  Statutory  Powers  Properly  Belonging  to  the  Board  of  Education 

Now  Vested  in  Bodies  or  Officials  Nominally  Subordinate  to  the 
Board  but  in  Fact  Superior  in  Respect  of  Such  Powers 39 

t  frequent  Changes  and  Conflict  of  Laws  Governing  the  Administra- 
tion of  Schools 38 
Finances    39 
i-Political  Board  of  Education •  • 41 
[ix] 
. 


x  CONTENTS 

Recommendation  on  the  Board  of  Education  —  Continued  PAGE 

Appendix,  Education  Under  the  Greater  New  York  Charter 45 

Education  Under  the  Provisions  of  Chapter  786,  Laws  of   19d7,  as 

Amended  through   1921 50 

1.  Reduction    in    Size    of    Board    of    Education    from    46    to    7 

Members 57 

a.  Inadequate    School    Accommodations 59 

•Statement  Showing  the  Corporate  Stock  Authorizations  and 
Cash  Expenditures  from  January  1,  1910,  to  June  30 
1921 .'  66 

b.  Fire  Hazards  in  Schools 67 

Authorizations  and  Expenditures  for  Fire  Prevention  Work 
as  of  August  10,  1921 63 

c.  Failure  to  Repair  Fire  Damage  to  Board  of  Education  Build- 

ing   •: 71 

d.  Incomplete  By -Laws  and  Delayed  Minutes 73 

2.  Possibilities  of  Conflict  Between  the  Board  of  Education  and 

the  Superintendent  of  Schools,  Relative  to  Respective 
Powers 75 

3.  Possibility  of  Conflict  Between  the  Board  of  Education  and 

the  'Municipal  Authorities  Relative  to  their  Respective 
Powers  78 

4.  Failure  to  Concentrate  in  Clear  and  Unmistakable  Language 

Full  Responsibility  for  the  Proper  Administration  of  the 
Public  School  System  either  on  the  Municipal  Authorities, 
the  Board  of  Education  or  the  State  of  New  York 86 

5.  Limitation  of  the  Powers  of  the  Board  of  Education 86 

6.  Great    Increase    in    the    Powers    of    the    Superintendent    of 

Schools    • 86 

7.  Perpetuation  of  the  Board  of  Superintendents 86 

8.  Perpetuation  of  the  Bureau  of  Compulsory  Education,  School 

Census  and   Child   Welfare 87 

9.  Conflict  Between  Section  1102  of  the  Charter,  Which  Was  Not 

Specifically  Repea^d,  and  the  State  Education  Law,  Rela- 
tive to  the  Disposition  to  be  Made  of  the  City's  Share  of  the 
State  School  Moneys,  the  Former  Providing  that  Such 
Money  be  Credited  to  the  City's  General  Fund  for  the 
Reduction  of  Taxation  and  the  Latter  that  it  be  Credited  to 
the  Board  of  Education 88 

10.  Increase  from  3  Mills  to  4.9  Mills  in  the  amount  Which  the 

City  is  Required  Annually  to  Appropriate  for  the  Use  of 
the  Board  of  Education 89 

11.  The   Inclusion   Within   the    State's   Educational    System,   of 

City  Boards  of  Education  of  the  City  of  New  York  and 
the    Subordination   of  the   Municipal   Authorities   to  the 

State  in  Matters  of  School  Administration 94 

Development  of  Public  Education  in  the  State  and  City  of  New  York 

Prior  to    1897 96 

Historical  Development  of  the  Educational  Section  of  the  State 

Constitution 96 

Dutch   Colonial  Period 98 

English   Colonial  Period,   1664-1776 98 

Education  Under  the  First  Constitution,  1777-1821 99 

Education  Under  the  Second  Constitution,   1822-1846 102 

Summary 105 

The  EvoHition  of  Public  Education  in  the  Present  City  of  New 

York 107 

The  Former  City  of  New  York 107 

Brooklyn    .....! 116 

Queens   and  Richmond 119 


CONTENTS 


XI 


FOURTH  REPORT  PAGE 

Report  of  the  Finances  of  the  City  of  New  York,  March,  1922 123 

Abuses  in  Financial  Management 124 

(a)  Revenue  Bonds    125 

(b)  Special   Revenue   Bonds 125 

(c)  Tax  Notes   12)6 

The   Abandonment  of    the    "  Pay-As-You-Go "   Policy 136 

Tax  Limit  Exceeded 138 

Debt   Limit   Exceeded 140 

General  Consideration  on  the  Tax  Limit  and  the  Debt  Limit 142 

Manifest  Financial  Reforms 142 

State  Taxes   143 

Financial  Requirements   of  City 144 

Necessity  of  Constitutional  Amendment 144 

Recommendations  for  Relief 144 

Exhibit   "A,"    Showing   Growth   of  Net   Funded   Debt  Less   Sinking 

Fund  Since  Consolidation 146 

Exhibit  "  B,"  Showing  Cost  of  Administration,  Debt  Service,  Tax 

Deficiencies,  State  Taxes  and  Total  Budget  Since  1910 146 

Exhibit  "  C,"  Showing  Budget  Total,  General  Fund  Revenues 

Deducted  and  Amount  of  Tax  Levy 147 

Exhibit  "  D,"  Schedule  of  Real  and  Personal  Property  Assessments 

Since  1918  147 

Exhibit  "  E,"  Schedule  Showing  Yearly  Per  Capita  Cost  and  Average 

Per  Capita  Costs  Under  the  Various  Administrations 148 

Exhibit  "  F,"  Statement  Showing  the  Amount  of  Uncollected  Taxes 

as   at  December   31,    1921,  Classified  as  to  General  Character  of 

'Property  Against  Which  Taxes  are  Levied 150 

Exhibit  "  G,"  Schedule  Showing  Monthly  Outstanding  Balances  of 

Corporate   Stock  Notes,   Special  Revenue  Bonds  and   Bills  of  the 

Period  December  31,  1917,  to  June  30,  1921 151 

Exhibit  "  H,"  Schedule  of  Special  Revenue  Bond  Authorizations 

During  Year  1920 155 

Exhibit  "I,"  The  Story  of  the  City's  Sinking  Fund  Transactions 

During  1920 15« 

Exhibit  "  J  " 162 

Report  on  the  City  of  New  York,  Made  for  the  New  York  State 

Legislative   Committee   to   Investigate  the  Affairs  of  the  City  of 

New  York 165 

Exhibit  "  K,"  Memoradum  by  Counsel  for  the  Joint  Legislative 

Committee  on  Constitutional  Limitation  of  the  Taxing  Power  of 

the  City  of  New  York 167 

Exhibit  "L,"  Memorandum  by  Counsel  for  the  Joint  Legislative 

Committee  on  the  Constitutional  Limitations  of  the  Debt  Incurring 

Power  of  the  City  of  New  York 171 


FIFTH  REPORT 
Report  and  Summary  of  the  Evidence  Concerning  Mandatory  Legislation, 

Department  of  Police  Licenses,  Markets  and  Public  Welfare 187 

Mandatory  Legislation  Affecting  the  City  of  New  York 189 

Appropriations  which  are  Completely  Mandatory 189 

Prevalence  of  Mandatory  County  Legislation 189 

Items  which  -are  Partly  Mandatory 189 

1902  General  Repeal  of  Mandatory  Charter  Provisions 190 

Ancient  and  Obscure  Mandatory  Statutes 190 

Banket  Repeal  of  Mandatory  Legislation  Recommended 191 

Exhibit  1.  Mandatory  County  Salaries 191 

Exhibit  2.  Mandatory   County  Salaries •  • 207 

Exhibit  3.  Brown    Bill   of   1916   giving  city   authority  over   county 

salaries    .                                              ^08 


xii  CONTENTS 

Summary  of  Evidence  Concerning  Mandatory  Legislation  —  Cont'd.         PAGE 

Exhibit  4.  Mandatory  Salaries  in  1921  Budget 210 

Exhibit  5.     Brown  Bill  of  1916  giving  local  authorities  over  all  city 

salaries  excepting  teachers  and  elective  officers 212 

Political  Interference  with  Police  Administration 214 

Hylan  Recommends  Solovei 215 

The  Experiences  of  Deputy  Commissioner  O'Grady 218 

From  Assistant  Secretary  Sinnott,  May  10,  1919 220 

From  Executive  Secretary  Kelly,  January  23,  1920 220 

From  Grover  Whalen,  June  18,  1918 220 

From  Grover  Whalen,  May  10,  16,  18,  October  25,  1918 221 

Illegal  Police  Reinstatements 222 

Act  of  1907 222 

Amendment   of   1915 222 

Abolition  of  Board  of  Review 222 

Ordinance  of  July  2,   1918 222 

Executive  Board  Created 223 

Advisory  Committee  Appointed 223 

The  "  Functus  Officio  "  Opinion 223 

Illegal  Reinstatements    224 

Reinstated  after  "  Functus  Officio "  Opinion 224 

Reinstatement  after   Dismissal  Affirmed 224 

Reinstatement  after  Hearing  Denied 225 

Maher  Case    .  . 226 

Demoralization  of  the  Quartermaster's  Division 227 

Private  Cars  Maintained  by  Police  Department 233 

1918    Police    Games 236 

Speculation  and  Money  Making  by  Police  Officials 240 

Richard    E.    Enright 240 

Edward  P.  Hughes 241 

Dominick  Henry 241 

John   F.   Dwyer 242 

The   Apartment  House   Transaction 243 

The  Hotel  Van  Cortland  —  Hotel  De  France 245 

The  Wire   Tapping   Case 246 

(Division  of  Licensed  Vehicles  of  Department  of  Licenses 248 

The  Routine  of  a  Taxi-Driver's  Application 250 

The  Administration  of  the  Department  of  Markets 255 

The  Establishment  of  the  Department 255 

The  Rules    256 

The  Rules  Administered 256 

The   Haslot   Case 257 

The  Heineman    Case 257 

The  Woolsey  Case 261 

Kahn-Kloeblein  Case    263 

The  Katenkamp  Case 268 

The  Turner   Case 272 

The  Case  of  Barnet  Cohen 273 

The  Lewis  Cases  275 

The  Michels-Telephone  Company  Case •  • 278 

Market  Supervisors 2S2 

Sale  of  Army  and  Navy  Food  Supplies 283 

Department  of  Public  Welfare  —  Kings  County  Hospital  Job 284 


FIRST  REPORT 


NEW  YORK  STATE  JOINT  LEGISLATIVE  COMMITTEE 
TO  INVESTIGATE  THE  AFFAIRS  OF  THE  CITY  OF 
NEW  YORK 

December  19,  1921 


[1] 


FIRST  REPORT  OF  THE  LEGISLATIVE  COMMITTEE 

December  19,  1921. 
To  the  Charter  Revision  Commission: 

The  committee  deems  it  advisable  at  this  time  to  report  its 
conclusions  as  to  some  basic  changes  in  the  charter  of  the  City 
of  New  York. 

The  principal  legislative  powers  of  the  city  are  now  vested 
in  the  Board  of  Estimate  which  is  composed  of  the  executive  or 
administrative  officers  of  the  city.  The  Committee  proposes  that 
the  executive  or  spending  power  be  separated  from  the  appro- 
priating power,  and  for  this  purpose  recommends: 

(a)  That  a  Board  of  Finance  of  nine  members  be  elected  by 
the  city  at  large  for  six  years,  three  to  be  elected  every  other  year. 

(b)  That  the  members,  although  elected  by  the  whole  city, 
be  resident,  as  follows :     Three  in  Manhattan,  three  in  Brooklyn, 
and  one  in  each  of  the  other  boroughs. 

(c)  That  the  Board  of  Estimate  and  Apportionment  and  the 
Sinking  Fund  Commission  be  abolished,  and  all  the  powers  of 
both  boards  over  city  finances  be  transferred  to  the  Board  of 
Finance. 

(d)  That  the  Board  of  Finance,  either  upon  the  recommenda- 
tion of  the  Mayor,  or  upon  its  own  motion,  have  the  power  to 
abolish,  modify  or  consolidate  the  various  departments  of  the  city. 

(e)  That  the  Board  of  Finance  have  the  power  of  confirma- 
tion over  appointments  to  the  Board  of  Taxes  and  Assessments, 
whose  tenure  of  office  is  to  be  fixed  like  members  of  the  Board 
of  Education. 

(f )  That  the  Board  of  Finance,  on  the  request  of  the  Mayor, 
or  on  its  own  motion,  have  the  power  of  removing  city  officers 
by  a  two-thirds  vote  for  cause. 

(g)  That  the  Mayor  transmit  a  budget  for  the  support  of  the 
entire  city  and  of  county  governments  to  the  Board  of  Finance, 
and  have  the  power  of  veto  over  the  Board  of  Finance,  subject 
to  being  overridden  by  a  two-thirds  vote. 

(h)  That  the  office  of  President  of  the  Board  of  Aldermen 
be  abolished  at  the  end  of  the  term  of  the  newly-elected  incum- 

[3] 


4         *  Iis-vESti&A*ci6:»  -OF '  AFFAIRS  OF  NEW  YORK  CITY 

bent,  the  Board  of  Aldermen  retaining  its  present  powers  and, 
like  the  Board  of  Finance,  choosing  its  own  presiding  officer. 

(i)  That  for  the  purpose  of  insuring  complete  financial  con- 
trol of  the  new  Board  of  Finance,  all  mandatory  legislation  fixing 
charges  on  the  city  or  the  counties  for  services  of  a  purely  local 
nature  be  repealed,  and  that  further  legislation  of  this  character 
be  effectually  restrained  by  constitutional  enactment. 

(j)  That  the  Mayor,  Comptroller  and  Borough  Presidents 
retain  their  executive  and  administrative  powers  unimpaired. 

The  new  board  should  be  chosen  at  the  annual  election  in  1923, 
and  prepare  its  first  budget  for  the  year  1925,  since  the  budget 
for  1924  would  be  prepared  before  they  come  into  office. 

The  Committee  are  of  the  opinion  that  if  this  plan  be  adopted 
it  will 

First. —  Separate  the  appropriating  power  from  the  spending 
power  —  the  legislative  from  the  executive.  When  a  city  rivals 
States  in  population,  objections  to  uniting  these  powers  in  States 
applies  to  the  city.  Such  powers  were  united  in  small  munici- 
palities on  the  analogy  of  business  corporations,  but  in  large  cor- 
porations there  is  usually  a  division  of  such  powers; 

Second. —  Furnish  an  opportunity  for  the  city  to  become  articu- 
late —  to  speak  directly  and  exclusively  on  the  financial  issue 
every  two  years.  The  duties  of  the  new  board  will  be  financial. 
Parliaments  and  Legislatures  are  mostly  concerned  with  appro- 
priations. A  vote  for  Mayor  or  Comptroller,  etc.,  under  the 
present  system,  gives  no  means  for  such  an  expression,  and  is 
usually  given  with  the  express  purpose  of  securing  some  expendi- 
ture without  providing  any  check  on  the  amount  available,  or 
supervision  over  its  expenditure  in  the  sense  that  States  and 
Nations  have  checks  over  expenditures  through  the  appropriating 
power ; 

Third. —  From  the  dignity  and  authority  of  the  body,  and, 
owing  to  its  limited  membership,  from  the  dignity  and  authority 
of  the  several  members,  and  also  by  reason  of  its  freedom  from 
administrative  duties,  attract  the  best  class  of  candidates  avail- 
able. It  is  hopeless  to  induce  persons  of  high  qualifications  to 
undertake  local  administration  by  piecemeal.  Nothing  less  than 
general  control  over  the  finances  of  the  city  will  successfully 
invite  such  talent.  The  election  by  the  city  at  large  of  the 
members  of  the  Board  of  Finance,  besides  tending  to  unify  the 
sentiment  of  the  city  on  the  principal  question  relating  to  city 
government,  will  be  the  best  means  of  securing  candidates  of 
capacity  and  character. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  5 

Fourth. —  By  creating  a  legislative  body,  promote  and  invite 
a  more  extensive  delegation  of  powers  of  local  legislation,  includ- 
ing the  abolition,  modification  and  combination  of  departments, 
and  require  a  repeal  of  mandatory  State  legislation  of  a  local 
character;  it  will  also,  from  its  nature,  be  a  powerful  factor  in 
shaping  legislation  affecting  the  City  of  Albany. 

Fifth. —  Through  the  power  of  confirmation  of  members  of  the 
Board  of  Taxes  and  Assessments,  and  the  fixed  tenure  of  office, 
make  them  more  independent  of  official  interference  in  the  per- 
formance of  their  important  public  duties  and  prevent  the  man- 
ipulation of  the  board  to  meet  the  necessities  of  an  extravagant 
administration.  The  power  of  removal  for  cause  will  operate 
as  a  check  on  malfeasance  in  city  offices. 

Sixth. —  Inspire  civic  interest  and  activity  by  recognizing  the 
due  sense  of  municipal  importance,  power  and  responsibilities  of 
which  the  citizens  of  such  a  city  must  be  conscious,  and  nourish 
public  spirit  and  develop  intelligence  on  the  fundamental  matters 
of  finance  and  expenditure,  which  are  not  now  in  any  adequate 
way  brought  home  to  the  voter  when  he  gives  expression  to  his 
views  by  the  ballot. 

Seventh. —  Furnish  an  opportunity,  now  lacking,  to  the  admin- 
istrative officers  of  the  city  to  give  adequate  time  and  attention 
to  administration. 

The  urgent  reasons  for  a  change  in  the  system  of  city  govern- 
ment now  in  force  are  apparent,  and  may  be  summarized  as 
follows : 

I.    FINANCIAL 

The  maintenance  of  the  city  in  a  sound  financial  condition, 
with  a  credit  equal  to  meeting  its  public  necessities,  is  of  the 
first  importance  to  the  municipality  and  its  citizens  and  to  the 
State.  The  city  debt  has  increased  every  year  since  the  city 
was  organized.  The  gross  funded  debt  in  1898  was  $344,000,000, 
of  which  $212,000,000  had  been  incurred  for  non-revenue  pro- 
ducing purposes.  This  debt  (exclusive  of  general  fund  bonds) 
had  increased  in  1921  to  $1,246,000,000,  of  which  $835,000,000 
was  non-revenue  producing.  In  addition  to  this,  the  city  carries 
a  temporary  debt  of  approximately  $100,000,000,  which  is  not 
computed  in  determining  the  debt  limit. 

The  tax  levy  has  kept  pace  with  the  growth  of  the  debt.  The 
budget  in  1898  was  $77,000,000  and  in  1921  $345,000,000, 
while  the  per  capita  charge  for  taxes  has  risen  from  $23.12  in 
1898  to  $59.77  in  1921. 


6  INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

The  tax-roll  has  increased  from  upward  of  $3,000,000,000  in 
1898  to  $10,186,207,279  in  1921,  the  rate  of  increase  being 
reasonably  uniform  from  1904  to  19'21,  when  the  real  estate 
assessment  jumped  from  $8,626,000,000  to  $9,972,000,000  in  an 
attempt  to  keep  within  the  debt  and  tax  limit.  The  exact 
increases  are  not  yet  obtainable  for  the  year  1922,  but  the  pre- 
liminary estimate  furnished  the  Comptroller  by  the  Department 
of  Taxes,  places  the  1922  assessment  at  $10,500,000,000. 

Without  taking  up  now  the  pending  questions  relating  to  the 
debt  limit  and  tax  limit,  it  is  beyond  controversy  that  the  city 
is  using  its  entire  taxing  power  for  ordinary  expenses,  in  the 
face  of  urgent  needs  for  essential  public  service  —  schools,  rapid 
transit,  docks,  markets  and  a  marginal  railway.  Instead  of 
furnishing  evidence  of  the  city's  financial  soundness,  the  rapid 
rise  in  assessments  indicates  the  exhaustion  of  the  city's  credit, 
and  a  manipulation  of  the  taxing  power  to  conceal  it.  It  may 
be  added  that  in  1921  the  city  found  it  necessary  for  the  first 
time  to  resort  to  the  doubtful  expedient  of  basing  its  tax  limit 
on  the  current  assessment  rather  than  on  the  assessment  of  the 
year  before,  as  heretofore  practiced  in  other  cities  of  the  State, 
and  the  present  budget  indicates  that  the  same  doubtful  expedient 
of  increasing  the  taxing  power  will  be  resorted  to  in  1922,  in  an 
attempt  to  keep  within  the  constitutional  tax  limit.  The  Comp- 
troller has  publicly  advised  the  Board  of  Aldermen  of  the  neces- 
sity of  cutting  $10,000,000  out  of  the  appropriation  for  schools 
to  keep  within  such  increased  limit. 

Such  a  showing  gives  no  promise  of  recovery  under  the  present 
municipal  organization,  but  foreshadows  financial  disaster. 

II.    DIVISION  OF  AUTHORITY  BETWEEN  THE  CITY  AND  THE 

LEGISLATURE 

It  is  apparent  from  the  number  of  amendments  to  the  charter 
since  its  re-enactment  in  1901  that  it  is  not  laid  down  on  reason- 
ably permanent  lines.  As  appears  by  the  session  laws  the  charter 
has  been  amended  or  modified  by  1,666  separate  laws,  exclusive 
of  general  laws  affecting  the  whole  State.  There  were  116  such 
laws  in  1920  and  82  in  1921.  Many  of  these  statutes  fix  salaries 
of  city  or  county  officers;  52  such  statutes  have  been  passed  in 
the  last  four  years.  Five  hundred  and  five  bills  amending  the 
charter  have  been  vetoed  by  the  Mayor  since  1907,  and  with  the 
bills  introduced  but  not  passed  by  the  Legislature,  form  a  vast 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  7 

mass   of  legislation  claiming  the   attention   of  the   Legislature. 
This  legislation,  whether  passed  or  not,  results: 

(a)  In  a  constant  disturbance  of  municipal  finance  and  admin- 
istration, frequently  creating  uncertainty  of  purpose  and  policy 
in  the  conduct  of  the  city  government. 

(b)  In  causing  a  feeling  of  resentment   and   dissatisfaction 
over  State  interference  with  matters  that  are  purely  local  in  their 
nature. 

(c)  In    dividing   powers    of   municipal   control    in    the    city 
between  municipal  authorities  and  the  members  of  the  Legisla- 
ture from  the  city,  who  generally  control  such  legislation.     This 
results  in  frequent  differences  between  the  city  authorities  and 
the  Legislature,  and  through  his  power  of  approval  and  veto  of 
city  bills,  between  the  Mayor  and  the  Board  of  Estimate.      The 
Mayor  is  thus  enabled  from  time  to  time  to  secure  legislation 
affecting   the   government   of  the   city  through   the   Legislature 
which  he  could  not  obtain  through  the  Board  of  Estimate. 

(d)  In  an  equally  unfortunate  effect  on  the   State,   as  the 
Legislature  is  thus  occupied  unnecessarily  with  local  affairs  to 
the  exclusion  or  detriment  of  general  legislation. 

These  conditions  are  the  cause  of  general  dissatisfaction,  and 
not  infrequently  such  dissatisfaction  is  directed  toward  the  State 
government,  although  such  legislation  could  not  be  enacted  with- 
out the  active  support  of  city  members  of  the  Legislature  and  thf 
consent  of  the  Mayor. 

The  present  system  has  worked  badly  and  calls  for  basic  change* 
in  the  charter  and  in  the  relations  of  the  city  to  the  State.  Other- 
wise present  evils  will  not  only  continue  but  become  a  greater 
menace  to  the  public  welfare. 

III.    ADHERENCE  TO  PRECEDENTS 

Present  conditions  are  undoubtedly  due  to  a  too  close  adherence 
to  municipal  precedents  which,  by  reason  of  the  size  of  the  city 
and  its  organization,  are  more  or  less  inapplicable.  They  have 
preserved  the  form  but  discarded  the  substance  of  such  municipal 
organization  by  depriving  the  taxpayers,  as  such,  of  any  par- 
ticipation in  the  city  government.  This  city  exercises  much 
wider  authority  than  is  exercised  by  London,  Paris  or  Berlin. 
There  is  an  inherent  unsuitability  in  attempting  to  fit  the  institu- 
tions of  a  village  or  of  a  city  of  ordinary  population  to  a  munici- 
pality greater  in  population  than  any  State  in  the  Union,  except 


8  INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

New  York,  Pennsylvania  and  Illinois;  wealthier  than  any  State 
in  the  Union,  except  the  State  of  which  it  is  a  part;  with  an 
annual  budget  exceeded  by  few  Nations,  greater  than  the  three 
largest  States  in  the  Union  combined,  and  without  a  parallel 
where  such  appropriations  are  made  by  executive  authority ;  with 
a  variety  of  responsibilities  in  government  of  great  public  impor- 
tance; and  having  some  problems  unknown  in  other  munici- 
palities by  reason  of  county  organization. 

On  the  other  hand,  changes  should  be  made  only  for  the  pur- 
pose of  correcting  conditions,  and  not  to  establish  a  Utopia,  or 
to  vindicate  any  theory  of  government.  The  present  system  is 
not  bicameral,  since  the  functions  of  the  present  Board  of  Esti- 
mate and  Board  of  Aldermen  are  not  joint,  but  chiefly  separate. 
This  will  be  true  also  of  the  Board  of  Finance  and  the  Board 
of  Aldermen,  and  there  will  be  no  more  reason  for  abolishing 
the  Board  of  Aldermen  which  furnishes  a  means  of  popular 
expression  on  matters  of  peculiarly  local  concern,  after  the  Board 
of  Finance  is  established,  than  before. 

IV.  LIMIT  OF  DELEGATION  OF  STATE  AUTHORITY  TO  THE  CITY 
Under  our  system  of  government,  two  classes  of  powers  are 
delegated  to  the  city,  those  which  are  of  purely  local  concern, 
and  those  embracing  matters  which  are  of  State-wide  importance, 
like  the  police,  education  and  the  local  administration  of  justice. 
The  Committee  is  of  the  opinion  that  the  powers  of  the  city  over 
matters  of  purely  local  concern  should  be  increased,  and  legisla- 
tive interference  with  the  exercise  of  such  powers  should  be 
further  and  effectually  restrained  by  constitutional  enactment. 
Such  enactment  should  also  include  a  provision  giving  power  to 
the  new  Board  of  Finance,  in  conjunction  with  the  Mayor,  to 
veto  legislation.  The  restriction  as  to  interference  with  matters 
of  a  purely  local  nature  may  be  much  stricter  than  in  matters  of 
State-wide  interest.  While  a  municipality  may  be  permitted 
to  mismanage  its  own  peculiar  interest,  it  cannot  be  permitted 
to  prejudice  those  of  others  or  to  violate  principles  of  justice 
in  dealing  with  its  own  citizens. 

Considered  in  its  broader  aspect,  there  can  be  no  real  conflict 
of  interest  between  the  State  and  city  in  changes  in  the  charter. 
It  is  the  duty  of  the  State,  of  which  the  city  forms  so  great  a  part, 
to  secure  for  the  city  the  greatest  degree  of  autonomy  consist  out 
with  safety,  financial  soundness  and  security  of  citizens ;  but  these 
matters  are  of  equal  concern  to  the  State  and  to  the  city. 


KEPOET  OF  JOINT  LEGISLATIVE  COMMITTEE  9 

This  report  is  made  under  the  provisions  of  the  resolution 
appointing  this  Committee,  as  a  recommendation  to  the  Charter 
Revision  Commission.  Other  reports  covering  the  Committee's 
investigation  will  be  submitted. 

Kespectfully  submitted, 

SCHUYLER  M.  MEYER, 

Chairman. 

THEODORE  D.  ROBINSON, 
MAXWELL  S.  HARRIS, 
FREDERICK  W.  KAVANAUGH, 
ISIMON  L.  ADLER; 
SOL  ULLMAN, 
WALTER  W.  WESTALL, 
JOHN  R.  YALE. 

I  approve  of  the  report  in  every  respect,  except  that  I  believe 
the  five  boroughs  of  the  city  should  elect  their  own  representatives 
to  the  proposed  Board  of  Finance  as  opposed  to  city-wide  selection. 

THEODORE  STITT. 


MINORITY  REPORT 


It  is  the  opinion  of  the  undersigned,  the  minority  of  the  Com- 
mittee, that  no  recommendations  should  be  made  at  this  time  to 
the  Charter  Revision  Commission.  It  is  its  opinion  that  only 
as  the  outcome  of  a  consideration  which  they  have  been  unable 
to  give,  that  any  views  they  may  entertain  011  a  revision  of  the 
present  charter  should  be  the  result  of  a  longer  and  fuller  con- 
sideration. Inasmuch  as  nothing  developed  as  the  outcome  of 
the  investigation,  which  has  continued  since  last  May,  of  the 
affairs  of  the  City  of  New  York,  to  warrant  the  recommendations 
made  in  the  majority  report,  the  minority  dissents  totally  from 
the  conclusions  and  recommendations  made  therein.  In  general, 
the  minority,  members  of  the  Legislature  elected  from  the  City 
of  New  York,  are  not  at  this  time  prepared  to  recommend  the 
extension  of  any  offices,  nor  are  they  prepared  to  agree  that  the 
powers  of  the  Board  of  Estimate  and  Apportionment,  particularly 
the  powers  of  the  Mayor  and  Comptroller,  should  in  any  degree 
be  divided  or  curtailed.  Particularly,  in  view  that  the  very 
handsome  as  well  as  substantial  majority  by  which  the  adminis- 
tration of  the  office  of  Mayor  and  Comptroller  were  ratified  and 
endorsed  by  the  people  not  more  than  a  month  ago,  it  would  seem 
that  they  should  be  given  an  opportunity,  in  obedience  to  the  will 
so  emphatically  expressed,  to  correct  whatever  deficiencies  in  the 
administration  of  the  present  charter  may  exist. 

The  minority  is  unanimous  that  whatever  decision  shall 
be  arrived  at  by  the  Charter  Revision  Commission,  they  recom- 
mend to  the  Legislature  that  the  charter,  before  it  becomes 
effective,  be  ratified  by  a  referendum  of  the  people  of  the  City 
of  New  York. 

Respectfully  submitted, 

JAMES  J.  WALKER, 
BERNARD  DOWNING, 
CHARLES  D.  DONOHUE, 
MAURICE  BLOCH, 
PETER  A.  McARDLE. 

[10] 


SECOND  REPORT 


REPORT  ON  THE  DEPARTMENT  OF  DOCKS 


January  31,  1922 


[ii] 


REPORT  ON  THE  DEPARTMENT  OF  DOCKS 


JANUARY  31,  1922 

To  ike  Legislature  and  to  the  Charter  Revision  Commission: 

The  administration  of  the  dock  department  has  been  marked 
by  a  lack  of  policy  in  relation  to  dock  rentals  and  charges  for 
docking  privileges: 

First. —  When  docks  are  available  for  lease  or  permit,  leases 
and  permits  are  issued,  without  notice  to  applicants  and  pros- 
pective applicants,  of  the  intended  action  of  the  department,  and 
publicity  is  avoided. 

Second. —  Leases  are  frequently  issued  to  stevedores  and  specu- 
lators having  no  claim  for  the  accommodation  of  ships,  when  ship 
owners  standing  in  immediate  need  of  the  accommodation  are 
unable  to  secure  it.  Such  leases  are  not  infrequently  granted  for 
a  less  rental  than  ship  owners  stand  ready  to  pay.  Unable  to 
secure  a  lease  or  permit  from  the  dock  department  directly, 
prospective  lessees  pay  large  sums  of  money  to  intermediaries 
supposed  to  possess  influence,  to  secure  favorable  action  on  their 
applications. 

Third. —  ~No  attempt  has  been  made  to  secure  an  adequate 
return  to  the  city  for  the  use  of  its  property,  or  an  income  suffi- 
cient to  cover  the  cost  of  carrying  its  investment.  Millions  are 
raised  by  taxes  annually  to  meet  the  interest  and  amortization 
of  dock  bonds  and  expenses  of  maintenance,  while  income,  readily 
obtainable  without  sacrifice,  and  more  than  equal  to  all  charges, 
is  wasted. 

Ships  frequently  berth  under  leases  issued  years  ago  at  a  quar- 
ter or  even  a  seventh  of  the  charge  to  ships  berthing  under  recent 
leases  or  permits.  Like  inequalities  prevail  in  payments  for 
privileges  currently  granted  under  the  subleasing  system.  The 
highest  return  now  received  by  the  city  on  the  assessed  valuation 
of  a  dock  is  for  Pier  69,  North  river,  12.1  per  cent,  and  the  lowest 
return  for  Pier  81,  North  river,  1.7  per  cent.  Inequality  and 
not  equality  of  cost  is  the  rule.  The  percentage  of  gross  returns 
on  assessed  values  in  outstanding  leases  is  shown  in  Exhibit  "A" 
hereto  attached. 

While  the  conditions  described  were  aggravated  during  1918- 
1921,  by  war  conditions,  the  main  causes  of  inefficiency  and  loss 
have  long  prevailed,  and  though  they  vary  in  degree,  as  in  the 

[131 


14         INVESTIGATION  OF  AFFAIRS  OF  ,NEW  YORK  CITY 

present  depression,  will  continue  unless  fundamental  changes  are 
made.  Even  in  the  present  depression,  representatives  of  some 
of  the  larger  lines  complained  before  the  Committee  of  their  ina- 
bility to  lease  piers  and  of  being  compelled  to  send  ships  to  other 
ports. 

The  inevitable  results  of  such  a  haphazard  administration  have 
been  to  tax  commerce  heavily  in  most  cases,  and  scarcely  at  all 
in  others,  under  the  pretence  of  furnishing  a  cheap  rate  to  all; 
to  deprive  the  city  treasury  of  revenue  to  which  it  is  entitled  by 
wastefulness,  improvidence  and  corruption,  and  to  drive  com- 
merce to  other  ports,  as  appears  by  the  testimony  of  representa- 
tives of  the  French  line,  the  Luckenbach  line  and  others,  and  by 
the  official  statement  of  Gen.  Black,  the  representative  of  the 
United  States  Shipping  Board. 

A  fair  charge,  based  on  the  rental  value  of  the  docks  leased  and 
equal  treatment,  would  encourage  commerce  and  increase  the 
revenue  of  the  city  by  many  millions  of  dollars. 

The  city  owns  235  docks,  exclusive  of  the  12  uncompleted 
Staten  Island  docks,  which  will  be  taken  up  separately.  This 
property  ,though  exempt  from  taxation,  was  assessed  in  1920- 
1921  by  the  tax  department,  as  required  by  law,  for  $212,226,576. 
Docks  assessed  at  $20,310,796  are  used  for  municipal  purposes, 
and  are  not  available  for  commerce.  The  balance,  available  for 
commercial  use,  is  assessed  at  $191,915,780. 

The  loss  of  taxes  on  the  docks  by  reason  of  municipal  owner- 
ship is  an  essential  element  in  comparing  municipal  ownership 
with  commercial  ownership.  Assuming  this  property  to  be  held 
and  managed  by  the  city  on  a  commercial  basis,  a  profit  and  loss 
statement  for  1920  shows  the  cost  of  carrying  this  property  as 
follows : 

Interest  on  $191,915,780  at  6  per  cent $11,514,946 

Cost  of  administration,  1920  .  , 1,202,427 

Two  per  cent  depreciation  on  estimated  value  of  the 

dock  construction  Jan.  1,  1920  ($70,000,000)  .  .  1,400,000 
Loss  of  taxes  on  dock  property  not  used  by  the  city, 

exempt ' t[  4,775,150 


$18,892,523 
Total  receipts  from  rentals  and  wharfage,  1920.  .          7,094,240 


Loss  to  city  on  investment  in  1920 $11,798,283 


OF  JOINT  LEGISLATIVE  COMMITTEE  15 

The  gross  revenue  of  the  department  ($7,094,240,  in  1920) 
consists  of  the  rent  from  docks  for  terms  of  years  and  receipts 
from  revocable  permits  and  wharfage.  Deducting  from  the 
gross  revenue  the  cost  of  operation  for  1920,  amounting  to 
$1,202,427,  leaves  an  apparent  margin  of  $5,891,813,  or 
$1,116,663  more  than  the  city  would  have  received  in  taxes  if 
the  docks  had  been  privately  owned.  This  equals  one-half  of  1 
per  cent  of  the  assessed  value.  This  balance  is  less  than  the 
amount  of  the  annual  depreciation  and  makes  no  provision  for 
annual  interest  or  amortization  charges  on  the  dock  bonds  which 
are  met  by  taxation,  or  for  any  return  whatever  on  the  investment 
in  the  dock  property. 

The  most  valuable  city  dock  property  consists  of  the  piers  on 
Xorth  river  between  the  Battery  and  59th  street.  These  piers, 
having  an  assessed  value  of  $117,073,500,  produced  in  19'20  a 
return  of  only  3.56  per  cent  in  gross  revenue  on  the  assessed 
valuation.  Privately  owned  piers  in  this  water  front  section 
produced  an  average  return  of  11.5  per  cent  during  the  year  1920, 
and  the  150  privately  owned  piers  were  operated  at  a  commercial 
profit.  Such  a  difference  in  the  rent  of  public  and  private  piers 
is  intolerable,  indicates  a  wastefulness  in  dock  management,  and 
opens  the  way  to  favoritism,  jobbing  and  corruption. 

PROFITEERING  IN  WHARFAGE 

If  shipping  and  commerce  paid  no  more  for  the  use  of  docks 
than  the  revenue  received  by  the  city,  the  availability  of  such 
great  facilities  at  so  little  cost  would  be  some  compensation  for 
the  loss  of  revenue  to  the  city.  But  the  proofs  indicate  that  the 
charges  paid  by  shippers  for  dock  privileges  far  exceed  the 
revenue  received  by  the  city,  and  are  undoubtedly  in  excess  of 
the  cost  to  the  city  of  carrying  its  dock  property  as  a  business 
investment. 

Charges  by  lessees  to  shippers  during  1920  on  24  leased  city 
piers,  contained  in  Exhibit  "  B,"  hereto  attached,  show: 

Aver  ago  daily  berth  charge  to  ship  owners  by  lessee.  $240 

Average  daily  berth  cost  to  lessee  on  basis  of  rent 

paid  to  the  City  of  New  York 63 

Or  expressed  upon  an  annual  basis  of  a  300-day 

year: 
Charge  to  ship  owners  by  lessees,  city  piers $5,685,000 


16         INVESTIGATION  OF  AFFAIBS  OF  NEW  YOKK  CITY 

Cost  to  lessees  of  city  piers,  on  basis  of  rent  to  city 

of  New  York $1,494,717 


Gross  profit  to  lessees  of  city  piers  (280  per 

cent  of  rent  paid  to  city) $4,190,283 


While  these  berthing  charges  were  for  time  when  the  lessees 
were  not  occupying  the  piers,  the  figures  establish  the  rate  of 
charges  on  ships  not  controlling  piers  during  this  period,  and  the 
market  value  of  berthing  privileges.  They  were  the  prevailing 
market  rates,  and  there  is  abundant  evidence  of  like  charges. 

The  dock  commissioner  during  the  last  four  years  has  issued 
to  stevedores  and  other  speculators,  not  ship  owners,  berthing 
permits  at  public  wharfage  piers,  which  in  turn  have  been  sublet 
to  ships  entering  the  port.  Charges  made  to  ships  for  berthing 
privileges  at  such  public  piers  (1920-1921),  set  forth  in 
Exhibit  "  C,"  hereto  attached,  show  that  such  ships  paid  for  their 
dockage  privileges  from  54  to  792  per  cent  more  than  the  clock 
department  received.  The  dock  department  charges  for  berth- 
ing privileges  are  in  part  regulated  by  law  (section  859  of  the 
charter,  originally  enacted  1882),  and  are  in  many  cases  not 
more  than  25  per  cent  of  the  present  market  value  of  the  privi- 
leges granted.  It  is  inconceivable  that  ships  would  pay  such 
a  profit  to  speculators  if  they  could  obtain  the  privileges  directly 
from  the  department  at  the  legal  rate.  This  abuse  was  abun- 
dantly proved.  The  following  cases  are  stated  as  illustrations: 

The  Maritime  Shipping  Company,  a  concern  without  capital, 
not  maritime,  and  owning  no  ships,  occupied  Pier  72,  at  the  foot 
of  East  24th  street,  from  September  1,  1919,  to  November  14, 

1920,  at  an  annual  rental  of  $40,000,  and  rented  berthing  privi- 
leges at  a  net  annual  profit  of  $61,000  over  the  rent  paid. 

Sabbatino  &  Company,  a  concern  composed  of  a  young  saloon- 
keeper's helper,  who  was  later  interested  in  a  small  moving  pic- 
ture house,  and  a  ship's  clerk  without  capital  and  not  engaged 
in  shipping,  received  from  the  dock  department  a  large  number 
of  berthing  permits  between  June  7,  1918,  and  September  22, 

1921,  which  they  sublet  to  ships  entering  the  port.     While  their 
records  were  destroyed  or  suppressed,  numerous  cases  of  sn^li 
rentals  showing  a  profit  of  from  66  to  400  per  cent  over  the 
amount  paid  the  dock  department  were  established.     They  were 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  17 

permitted  a  credit  account  with  the  dock  department,  and  de- 
posited during  this  period  over  a  million  dollars  in  bank. 

Little  or  no  effort  has  been  made  by  the  city  to  limit  or  restrict 
wharfage  charges  by  lessees  or  permittees.  It  is  inferable  from 
a  recent  case  that  the  dock  department  in  the  absence  of  a  reser- 
vation in  the  lease  is  without  power  to  limit  charges  for  wharfage 
made  by  a  lessee  for  a  term  of  years,  but  there  has  been  no 
serious  effort  to  change  the  law. 

Shipping  concerns  failing  to  obtain  such  privileges  on  direct 
application  to  the  department  are  often  compelled  to  seek  wharf- 
age accommodations  at  public  piers  through  stevedores  or  go- 
betweens,  who  enjoy  the  favor  of  the  department,  A  statement 
of  payments  to  go-betweens  will  be  submitted  and  marked 
Exhibit  "  D." 

LOSSES  ON  LONG  TEEM  LEASES 

A  principal  cause  of  loss  of  adequate  returns  on  dock  property 
is  found  in  long  term  leases  made  by  the  commissioner  of  docks, 
with  the  approval  of  the  Sinking  Fund  Commission.  Dock 
leases  are  restricted  by  law  to  a  term  of  ten  years,  but  through 
permitted  clauses  of  renewal,  the  terms  are  extended  to  from 
thirty  to  fifty  years,  with  a  provision  for  a  10  per  cent  advance 
in  rent  at  the  end  of  each  renewal  period.  The  value  of  piers 
as  shown  by  the  assessment,  and  charges  to  ships,  has  increased 
during  the  past  ten  years  a  hundred  per  cent,  or  ten  times  more 
than  the  advance  secured  by  these  leases  to  the  city. 

Three  leases  of  large  modern  city  owned  piers  in  South 
Brooklyn,  of  substantially  the  same  commercial  value,  illustrate 
the  city's  loss  from  such  leases.  The  pier  at  31st  street,  leased 
to  Cyprien  Fabre  in  1910  for  twenty  years,  produces  a  rental 
of  eighteen  cents  per  square  foot  of  area;  the  pier  at  30th  street, 
leased  in  1916  to  the  Norwegian  American  for  thirty  years,  and 
the  pier  at  29th  street,  leased  in  1916  to  the  United  States  Steel 
Products  Company  for  thirty  years,  produce  a  rental  of  thirty- 
six  cents  per  square  foot  of  area,  while  the  pier  at  33d  street, 
under  permit  to  the  Luckenbacli  Steamship  Company  in  1 
1920,  gave  a  return  of  $1.09  per  square  foot.  On  the  basis  of  the 
present  approximate  value  of  a  dollar  per  square  foot,  the  city 
loses  $350,000  a  year  on  these  three  piers,  and  will  continue  1 
lose  a  like  amount  annually  for  the  next  ten  years.  The  loss  to 
tl.o  city  on  these  three  leases  from  1920  to  their  expiration  wil 
approximate  $6,000,000. 


18         INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

Although  it  has  long  been  apparent  that  the  10  per  cent  in- 
crease at  the  end  of  each  renewal  period  was  wholly  inadequate, 
and  the  practice  was  condemned  before  the  committee  by  the 
commissioner  of  docks,  the  department  has  continued  to  issue 
such  leases  down  to  the  present  time,  eighteen  such  leases  having 
been  made  during  the  past  four  years. 

LOSSES  ON  STATEN  ISLAND  PIERS 

The  city  now  has  in  course  of  construction  and  Hearing  com- 
pletion twelve  piers  on  Staten  Island  at  an  approximate  cost  of 
twenty-five  million  dollars.  These  piers,  with  one  exception, 
have  been  leased  with  an  optional  ten-year  renewal  clause  for 
from  thirty  to  fifty  years  on  a  rental  basis  of  7^2  Per  cent  °f  the 
cost.  Four  of  them  have  been  leased  to  stevedoring  concerns 
who  own  no  ships.  The  city  retains  no  control  over  the  wharfage 
rates  which  the  lessees  may  charge,  thus  furnishing  every  oppor- 
tunity for  profiteering,  although  such  a  clause  was  included  in  the 
Luckenbach  permit  in  1919.  Two  of  these  four  piers  are  leased 
to  the  Pan-American  Corporation,  a  non-shipping  concern  which 
advised  the  committee  on  October  12,  1921,  that  their  piers  would 
cost  the  city  $6,000,000,  of  which  one  million  would  be  expended 
for  machinery  and  cargo  handling  equipment.  Using  these  piers 
as  illustrative  of  the  Staten  Island  piers  generally,  the  annual 
profit  and  loss  statement  for  the  first  ten  years  of  the  lease  is  as 
follows : 

Interest  on  $6,000,000,  cost  of  construction $360,000 

Two  per  cent  depreciation  of  the  dock  construction, 

other  than  machinery 100,000 

Seven    per    cent    depreciation    011    the  value    of 

machinery   70,000 

Loss  of  taxes  on  dock  property  because  not  privately 

owned,  on  valuation  of  $5,000,000 141.000 


Total   $671,000 

Eental    ,  450,000 


Annual  loss  .  $221,000 


At  this  rate  the  loss  on  the  twelve  piers,  costing  approximately 
four  times  as  much,  or  $25,000,000,  will  amount  to  more  than 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  19 

$800,000  annually,  or  if  there  be  no  loss  from  depreciation  on 
machinery  on  other  piers,  to  more  than  $600,000.  The  city's 
revenue  on  this  lease  over  loss  of  taxation  and  depreciation  is 
2.3  per  cent  of  the  cost,  or  about  one-third  of  the  legal  rate  of 
interest,  or  about  one-half  the  interest  paid  on  dock  bonds  issued 
to  raise  funds  to  build  the  docks. 

Adjoining  this  new  development  on  Staten  Island  to  the  south 
there  are  three  large  and  modern  piers  (erected  1917-1919) 
belonging  to  a  private  corporation,  comparable  in  capacity  with 
the  city  piers  for  the  accommodation  of  ships.  These  piers  pay 
the  owner  a  gross  return  of  43.4  per  cent  on  the  assessed  valuation. 
Adjoining  the  city  piers  on  the  north  are  four  old  piers,  also 
privately  owned,  which  pay  the  owner  a  gross  annual  return  of 
21.5  per  cent  on  the  assessed  valuation. 

Allowing  for  possible  increased  cost  because  of  recent  construc- 
tion and  possible  lack  of  economy  in  construction  because  done 
through  a  municipality,  there  seems  to  be  no  reason  why  the  city 
piers  should  not  have  been  leased  at  a  fair  business  return.  Why 
should  city  piers  be  operated  at  such  an  enormous  loss  when 
private  property  similarly  situated  is  operated  at  such  enormous 
profit  ?  There  is  no  evidence  of  any  resulting  benefits  from  such 
financial  sacrifices. 

LACK  OF  ZONING  AND  WAREHOUSES 

Failure  and  neglect  of  the  department  in  establishing  zoning 
districts  for  the  docking  of  ships,  and  adequate  warehouse  accom- 
modation, have  resulted  in  serious  loss  in  the  operation  of  the 
docks  and  the  accommodation  of  commerce. 

Zoning  districts  have  not  been  established  so  that  ships  arriv- 
ing at  the  several  channels  of  approach  to  the  harbor  can  be  docked 
at  the  nearest  piers,  or  with  reference  to  their  draft  or  the  desti- 
nation of  their  cargoes.  In  consequence  the  harbor  is  congested 
and  navigation  impeded  and  made  more  dangerous.  Ships  arc 
frequently  docked  at  piers  where  ships  of  greater  draft  could  He, 
while  docks  with  less  but  ample  depth  are  idle.  Ships  lie  in  the 
harbor  awaiting  berths,  when  there  is  room  for  all.  Cargoe 
destined  for  inland  shipment  or  local  distribution  are  unloaded 
at  inconvenient  points,  and  reshipment  and  distribution  delayed. 
Cargoes  are  unloaded  at  points  where  street  traffic  is  congested, 
and  the  cost  of  lighterage  and  trucking  greatly  increased.  There 
is  no  intensive  use  of  the  harbor  facilities.  These  additional 


*. 

20         INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

costs  have  to  be  borne  by  the  ships  that  dock  and  by  commerce, 
and  reduce  the  rental  value  of  the  piers. 

There  is  a  lack  of  warehouse  and  storage  facilities  at  the  docks. 
As  a  consequence  cargoes  frequently  lie  for  an  unreasonabV 
period  on  the  docks,  preventing  their  best  economic  use. 

CITY  WASTES  ITS  PROPERTY 

The  city's  proprietary  interest  in  the  dock  property,  acquired 
in  part  through  grants  from  the  State,  but  largely  by  expenditure 
of  the  taxpayers'  money,  is  assessed  at  more  than  $212,000,000, 
to  which  must  be  added  the  $25,000,000  invested  on  Staten  Island. 
The  property  is  undoubtedly  worth  more  than  $300,000,000,  and 
is  rapidly  increasing  in  value.  The  city  is  as  well  entitled  to  a 
reasonable  return  upon  its  business  investment  as  private  dock 
owners.  If  it  accepts  less,  its  action  should  be  controlled  by  con- 
siderations peculiar  to  its  own  interest  —  as,  for  example,  the 
competition  of  other  ports.  No  such  reason  is  apparent. 

Hitherto  the  difficulty  of  correcting  the  inequality  of  charges 
and  preventing  waste  of  the  city's  property  from  the  system  of 
leasing,  has  apparently  been  treated  as  an  excuse  for  the  continu- 
ance of  such  inequality  and  waste.  But  if  the  system  be  changed, 
great  improvement  in  the  equality  of  charges  and  great  increase 
in  revenue  will  immediately  be  realized  with  a  rapid  progression 
to  the  desired  end. 

The  management  and  control  of  the  proprietary  interest  in  the 
docks,  as  well  as  the  administration  of  the  public  utility,  are  sub- 
ject to  the  dual  control  of  the  commissioner  of  docks  and  the 
sinking  fund  commission.  While  the  commissioner  of  docks  is 
the  administrative  officer,  he  acts  in  the  more  important  matters, 
such  as  granting  long  term  leases  and  acquiring  dock  property, 
only  with  the  consent  of  the  sinking  fund  commission.  Through 
these  instrumentalities,  the  city  has  had  complete  control  of  these 
dock  properties  since  1888. 

No  legislation  has  been  passed  to  which  the  city  objected. 
The  out-of-date  provisions  of  the  statute  turning  the  docks  over 
to  the  city  have  remained  undisturbed,  and  still  furnish  cover  for 
the  abuses  in  dock  letting  and  management,  which  have  converted 
a  handsome  potential  income  into  a  deficit,  while  speculator?, 
profiteers  and  handy  men  accumulate  fortunes  from  its  use.  Not 
a  subject  of  popular  interest,  its  management  has  been  undis- 
turbed by  public  inquiry,  and  the  unbusiness-like  organization 


REPORT  OF  JOINT  LEGISLATIVE   COMMITTEE  21 

of  its  finances  has  hidden  from  pu'blic  knowledge  the  disastrous 
results  which  would  otherwise  be  obvious.  The  State  has  not 
intervened  to  apply  even  the  rudiments  of  public  utility  require- 
ments, such  as  equal  service  for  equal  charges,  and  equal  oppor- 
tunity for  service  to  all. 

UNSOUND  DOCK  FINANCES 

The  system  of  dock  finances,  with  its  diversion  of  dock  receipts 
to  other  city  purposes,  is  a  hindrance  to  the  construction  of 
new  docks,  and  the  maintenance  and  improvement  of  the  old. 
Receipts  from  the  docks  of  Manhattan  were  pledged  to  the  sinking 
fund  for  the  redemption  of  the  debt  of  the  old  City  of  New  York 
under  its  charter,  and  are  paid  into  this  fund.  Since  the  incor- 
poration of  the  greater  city,  such  receipts  from  other  boroughs 
than  Manhattan,  though  not  covered  by  such  charter  provisions, 
have  been  paid  into  this  fund  and  in  1920  receipts  from  other 
boroughs  amounted  to  $1,895,217.  The  reason  for  this  practice 
may  be  discovered  in  the  fact  that  these  receipts,  like  the  receipts 
from  Manhattan,  are  diverted  from  docks,  find  their  way  into  the 
city  treasury,  through  the  device  of  the  general  fund  bonds,  for 
current  city  expenses,  and  to  reduce  the  tax  rate.  The  city  had 
outstanding  in  1920  $101,372,036  in  dock  bonds  on  which  it  paid 
in  that  year  $4,353,464  interest.  Not  a  dollar  of  the  dock 
receipts  is  applied  to  interest  or  amortization  under  the  existing 
practice  or  to  new  construction  or  maintenance.  Sixty-nine 
million  dollars  of  these  bonds  were  irregularly  and  mistakenly 
exempted  in  computing  the  debt  limit,  by  order  of  the  Appellate 
Division  of  the  First  Department  in  1913  on  the  claim  that  the 
receipts  from  the  docks  by  the  city  were  sufficient  to  meet  the 
interest  charges  and  amortization  of  the  amount  exempted, 
although  all  of  such  receipts  went  to  this  sinking  fund  and  not  a 
dollar  of  such  receipts  was  paid  into  the  city  treasury.  The 
interest  on  the  bonds,  exempt  and  non-exempt,  and  the  amortiza- 
tion charges,  are  met  in  the  annual  levy  for  debt  service.  The 
additional  funds,  made  available  to  the  city  by  increasing  its  debt 
limit  through  this  exemption,  were  used  in  rapid  transit  con- 
struction. The  docks  were  sacrificed  in  aid  of  an  unrelated 
interest.  The  diversion  of  the  dock  receipts  from  payment  of  the 
debt  to  current  city  expenses  is  condemned  by  the  comptroller. 
While  this  tortuous  procedure  has  operated  to  increase  the  cash 
in  the  treasury  for  general  purposes,  it  is  an  evasion  of  the  Con- 


22         INVESTIGATION  OP  AFFAIRS  OF  $"EW  YORK  CITY 


stitutioii,  deprives  the  docks  of  the  revenue  applicable  to  the 
reduction  of  the  dock  debt  and  to  betterments,  and  leaves  dock 
appropriations  exposed  to  the  legal  limitations  of  the  city's  debt 
and  tax  limit  and  the  pressure  of  other  interests  for  a  place  in 
the  budget. 

EXCESSIVE  COST  OF  POLICING  DOCKS 

The  cost  of  policing  the  docks  of  the  city,  as  shown  by  the 
records  of  the  War  Department,  is  as  follows: 

1917  ......................................  $30,660,000 

1918  ......................................  33,850,000 

1919  ......................................  41,610,000 

1920  ......................................  35,850,000 

And  the  men  employed: 

1919  ......................................  19,000 

1920  ......................................  16,000 

1921.  12,000 


The  entire  police  budget  for  the  City  of  New  York,  with  its 
307  square  miles  and  approximately  6,000,000  inhabitants,  was: 

1917 $18,200,191 

1918 19,394,613 

1919 20,662,219 

1920 24,595,186 

1921 28,545,407 

And  the  number  of  men  employed  was : 

1917 ' 11,237 

1918 10,952 

1919 11,047 

1920..  11,197 


A  representative  of  a  large  shipping  company  testified  before 
the  Committee  that  "  the  entire  condition  along  the  water  front 
is  very  bad  and  that  all  private  detective  agencies  *  and 

our  own  employees  on  the  dock,  have  all  apparently  reached  a  very 
demoralized  state,  and  we  consider  that  something  radical  and 
extraordinary  has  to  be  done."  This  statement  may  be  accepted 
as  descriptive  of  conditions.  A  statement  of  the  number  of  men 
employed  and  the  amount  expended  is  sufficiently  suggestive  of 


or  JOINT  LEGISLATIVE  COMMITTEE  23 

the  necessities  of  a  complete  change  of  system.  Such  a  charge 
on  commerce  and  on  the  use  of  the  docks  is  a  staggering  burden, 
reflected  in  the  cost  of  living,  and  the  reduced  value  of  pier 
rentals.  This  excessive  cost  is  largely  due: 

First.. —  To  lack  of  a  general  agency  under  which  co-ordination 
of  service  is  possible.  Each  line  or  individual  ship  is  compelled 
to  rely  upon  its  separate  organization  for  police  purposes  without 
the  aid  or  co-operation  of  the  organization  of  any  other  line. 

Second. —  To  the  dependence  of  each  line  and  individual  ship 
upon  the  co-operation  of  the  police  department,  which  imposes 
its  own  private  conditions  in  making  the  dock  guards  special 
policemen,  dictates  the  appointment  of  heads  of  such  dock  guards 
and  the  employment  of  private  agencies  to  do  the  work.  One 
such  agency,  newly  organized,  but  enjoying  the  favor  of  the  police 
department,  took  over  the  policing  of  docks  for  forty  shipping- 
companies  in  1918.  Instances  of  compulsory  employment  as  a 
condition  of  police  co-operation  and  payments  to  an  inspector  in 
alleged  consideration  of  service  in  compelling  such  changes  were 
proved  before  the  Committee. 

Notwithstanding  the  expenditure  of  these  vast  sums  for  pro- 
tection, pilfering  and  theft  have  been  extensive  and  protection 
has  not  been  efficient.  This  condition  can  be  largely  accounted 
for  by  inefficient  organization,  by  the  compulsory  employment  of 
useless  or  untrustworthy  persons  and  by  the  radically  unsound 
relation  of  dock  protection  to  the  police. 

THE  POET  A  MATTER  OF  STATE  AND  NATIONAL  CONCERN 
While  the  port  constitutes  an  indispensable  prerequisite  of  the 
city's  prosperity,  and  the  city's  ownership  of  the  docks  is  an  impor- 
tant factor  in  protecting  the  city's  interest,  the  port  has  other 
relations  of  equal  or  greater  importance  to  the  State  and  Nation 
as  the  principal  port  of  entry  for  both.  The  character  of  its 
management  is  immediately  reflected,  not  only  in  the  cost  of 
living  and  the  employment  and  prosperity  of  its  citizens,  but  in 
the  cost  of  living  and  the  employment  and  prosperity  of  the  people 
of  the  whole  State  and  of  millions  of  people  throughout  the 
Nation.  As  a  part  of  the  Nation's  navigable  waters,  it  is  subject 
to  the  jurisdiction  of  the  Federal  government,  which  expends 
millions  annually  for  the  improvement  of  the  harbor.  It  is  the 
State's  most  important  public  utility,  and  as  such  has  always  been 
subject  to  the  State's  potential  control.  This  control  was  exer- 


24         INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

cised  down  to  1888,  when  it  was  transferred  to  the  city  by  act 
of  the  Legislature.  The  degree  of  control  which  the  State  exer- 
cises over  the  port  for  the  accommodation  of  ships  will  always  be 
determined  by  the  public  interest.  The  State  owes  an  obligation, 
not  only  to  the  city  and  its  people,  but  to  the  people  of  the  whole 
State,  to  secure  an  efficient  and  economic  management,  with  equal 
facilities  and  equal  charges  to  all. 

GROWTH  OF  THE  PORT 

A  statement  of  the  increase  of  business  of  the  port  will  aid  in 
understanding  the  matters  under  consideration.  The  world's 
mercantile  and  marine  tonnage  increased  from  22,151,651  tons 
in  1900  to  49,089,552  in  1914,  or  more  than  121  per  cent  in  four- 
teen years.  The  merchant  marine  of  the  United  States  increased 
in  the  same  period  from  4,424,497  tons  to  7,928,688  tons,  or  79 
per  cent.  The  value  of  imports  and  exports  at  the  port  increased 
in  the  same  period  from  $1,056,071,753  to  $2,124,592,146 
During  the  war  period  the  United  States  Merchant  Marine 
reached  16,324,024  tons  (1920)  and  the  value  of  the  imports 
and  exports  at  the  port  increased  to  $6,288,287,521. 

The  port,  by  its  great  natural  advantages,  has  reached  its 
present  position  among  the  ports  of  the  world,  in  spite  of  the 
mismanagement  of  its  docks,  but  with  increased  trade,  the  dis- 
advantages of  maladministration  have  become  more  burdensome 
and  a  greater  drawback  in  competition  with  other  ports. 

This  report  is  based  on  testimony  already  taken.  The  Com- 
mittee has  not  yet  completed  its  investigation  of  the  docks,  and 
the  subject  will  be  further  dealt  with  in  the  Committee's  final 
report  when  the  hearing  is  closed. 

RECOMMENDATIONS 

The  Committee  recommends: 

First. —  That  the  office  of  the  present  dock  commissioner 
originally  established  for  the  old  City  of  New  York,  and  the 
control  of  the  Sinking  Fund  Commission  over  the  docks,  be 
abolished. 

Second. —  That  a  new  dock  commission  of  three  members  be 
established,  to  be  appointed  by  the  Mayor,  one  from  a  list  to  be 
named  by  the  maritime  interests  of  the  city,  one  from  a  list  to 
be  named  by  the  New  York  Chamber  of  Commerce,  and  one  at 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  25 

will,  who  shall  be  chairman  of  the  commission.  That  the  tenure 
of  office  be  eight  years,  the  first  appointees  to  hold  for  four,  six 
and  eight  years,  respectively,  as  determined  by  law,  and  that  such 
commissioners  be  subject  to  removal  for  cause. 

Third. —  That  existing  provisions  of  law  affecting  the  dock 
finances  be  so  amended  that  all  receipts  from  the  docks  be  subject 
to  appropriation  by  the  city  for  the  following  purposes  and  in  the 
following  order  of  preference : 

1.  For  expenses  of  administration  of  the  dock  department. 

2.  For  payment  of  interest  and  amortization  of  dock  bonds. 

3.  For  the  maintenance  and  repair  of  docks  and  if  not  other- 
wise provided,  for  the  extension  of  docks. 

4.  For  the  transfer  of  any  surplus  not  required  for  the  purposes 
cited,  to  the  general  fund. 

Fourth. —  That  the  charter  and  all  laws  affecting  the  docks  be 
revised  in  harmony  with  the  recommendations  of  this  repart. 

Fifth. —  That  the  commission  have  power  to  fix  rates  of  all 
rental  charges  by  the  city,  by  lessees  and  by  private  dock  owners, 
such  charges  to  be  as  nearly  equal  for  the  service  as  existing 
conditions  permit;  to  provide  for  zoning  regulations;  to  restrict 
the  term  of  leases  to  a  year  unless  the  necessities  of  commerce 
require,  and  in  no  event  to  grant  leases  for  a  longer  term  than 
ten  years  without  a  revaluation,  or  in  a  manner  to  interfere  with 
the  general  development  of  the  port;  to  provide  for  the  appraisal 
of  the  rental  value  of  all  properties  leased,  and  to  fix  the  rental 
on  a  fair  business  basis  for  a  reasonable  return  from  such  value ; 
leases  of  city  docks  to  be  made  according  to  the  necessities  of 
commerce,  which  shall  be  determined  as  a  fact  by  the  commission ; 
no  lease  to  be  issued  without  reasonable  public  notice  of  the  inten- 
tion to  grant  it ;  applicants  who  would  be  entitled  from  the  neces- 
sities of  commerce  to  receive  such  lease,  to  be  listed  in  the  order 
of  their  respective  necessities,  and  preference  given  to  the  first 
one  on  such  list  who  will  pay  the  rental  fixed  therefor.  If  none 
of  the  applicants  listed  will  take  the  lease  at  such  rental,  then 
the  same  to  be  put  up  at  public  auction  and  leased  to  the  highest 
bidder  on  such  list,  subject  to  the  right  of  the  commission  to 
reject  any  and  all  bids. 

FixiTi. —  That  all  payments  for  procuring  or  aiding  in  procur- 
ing or  extending  leases  or  permits,  and  all  payments  in  connection 
therewith,  be  prohibited  unless  the  same  be  for  legal  proceedings 
had  before  the  said  commission,  or  in  court,  the  amount  of  such 


20         INVESTIGATION  OF  AFFAIES  OF  NEW  YORK  CITY 

payment  or  payments  in  every  case  to  be  subject  to  the  approval 
of  the  commission  or  court  before  which  the  proceeding  is  had ; 
all  leases  and  permits  to  contain  a  clause  that  if  this  provision  of 
law  be  violated,  the  commission  may  cancel  the  lease  or  permit  at 
any  time  during  its  continuance  without  waiver  for  any  cause. 

Seventh. —  That  the  policing  of  the  docks  when  under  lease  or 
permit,  now  treated  as  guarding  private  property,  be  conferred 
upon  a  commission  of  seven  members,  without  pay,  to  be  named 
in  the  bill,  representing  as  nearly  as  may  be  the  various  maritime 
interests  using  the  port ;  vacancies  to  be  filled  by  the  commission 
under  such  restrictions  as  will  insure  the  continuance  of  its 
representative  character ;  such  commission  to  have  power  to  estab- 
lish and  maintain  a  distinctive  organized  police  force  for  the 
protection  of  merchandise  on  the  docks,  and  to  fix  and  apportion 
charges  for  the  .services  rendered,  which  shall  be  sufficient  to  meet 
the  expenses  incurred ;  tha/t  in  the  employment  of  such  force 
preference  be  given,  as  far  as  consistent  with  the  interests  to  bo 
served,  of  honorably  discharged  soldiers,  sailors  and  marines; 
that  the  said  commission  have  the  power  to  promulgate  rules  and 
regulations  not  in  conflict  with  law  for  the  maintenance,  discipline 
and  control  of  such  police  force;  that  the  jurisdiction  of  such  com- 
mission or  its  police  force  upon  any  dock  be  conditioned  upon 
the  written  reqilest  of  the  lessee  or  permittee,  or  authorized  accent 
of  either,  or  the  commanding  officer  of  the  ship  using  the  dock, 
that  police  protection  be  extended  thereto. 

Respectfully  submitted, 

SCHUYLER  M.  MEYER, 

Chairman. 

SIMON  I.  ABLER, 

Vice-Chairman. 

THEODORE  DOUGLAS  ROBINSOX. 
MAXWELL  S.  HARRIS, 
SOL.  ULLMAN, 
THEODORE  STITT, 
JOHN  B.  YALE, 
WALTER  W.  WESTALL. 
ELON  R.  BROWN, 

Counsel. 


REPOET  OF  JOINT  LEGISLATIVE  COMMITTEE  27 

EXHIBIT    "A" 

Assessed   Value   and   Gross  Revenue   of  the  Dock  Department 
Properties,  1920,  ~by  Borough  and  District  Segregation 


Group 
I. 
II. 

Location 
North  river,  Battery  to  59th  street.  .  .  . 
East  river,  Battery  to  59th  street  

Gross 
revenue 
$4,175,215 
1,338,467 

Assessed 
valuation 
$117,073,500 
27,440,230 

Per- 
centage 
3.56 

4.86 

III. 
IV. 
V 

North  river,  59th  st.  to  Spuyten  Duyvil 
East  river,  59th  street  to  100th  street  .  . 
Harlem  river  .... 

256,619 
77,743 
84,907 

13,790,000 
3,019,400 
3,510,400 

1.87 
2.58 
2  41 

Sub-total  

$5,932,951 

$164,833,530 

3.59 

VI 

Brooklyn 

890  844 

20,690  100 

4  30 

VII 

Bronx 

12,694 

726,650 

1  74 

VIII. 

Queens  ...                               . 

34,388 

293,000 

11.72 

IX. 

Richmond       ...                   .           

141,304 

5,372,500 

2.63 

Total $7,012,181    $191,915,780        3.65 

GrROUP     I 

North  River,  Battery  to  Fifty-ninth  Street 

Individual 

Assessed  percentage 

No.  valuation;            Gross                            returns 

of          piers,  bulk-          income         Per^ -^- — > 

Class                               piers  heads,  etc.            return         cent      High         Low 
1  (a)  Shedded  piers  under  long  term 

lease 54  $81,812,500     $3,072,894       3.7         12.1           1.7 

1  (b)  Unshedded  or  open  piers  under 

long  term  lease 4  2,615,000             76,100       2.9           4.5           1.9 

1  (c)  Shedded  piers  occupied  by  per- 
mittees under  revocable  permits ..            7  8,667,000           700,929       8             11.1           4.9 
1  (d)  Piers  leased  to  lessees  under 

property  reversion  clauses 6  7,911,000  189,731      

1  (e)  Shedded  and  unshedded  piers 
maintained  by  the  city  for  public 

wharfage 15  8,840,000           135,559       1.5           6.1              .8 


Total 86     $109,845,500     $4,175,214       3.8 

Valuation  of  unallocated  property 7 , 228 , 000     


Grand  total $117,073,500  3.56 


INVESTIGATION  OF  AFFAIRS  OF  Jfajw  YORK  CITY 

GROUP    II 
East  River,  Battery  to  Fifty-ninth  Street,  Manhattan 


Class 

1  (a)  Shedded  pier  under  long  term 
lease 

2  (b)  Unshedded  or  open  piers  under 
long  term  lease 

2  (c)  Shedded  piers  occupied  by  per- 
mittees under  revocable  permits 

2  (d)  Piers  leased  to  lessees  under 
property  reversion  clauses 

2  (e)  Shedded  piers  maintained  by 
the  city  for  public  wharfage 

2  (f)  Unshedded  piers  maintained  by 
the  city  for  public  wharfage 


Total 

Valuation  of  unallocated  property 


No. 
of 
piers 

Assessed 
valuation  : 
piers,  bulk- 
heads, etc. 

Gross 
income 
return 

Individual 
percentage 
returns 

cent       High         Low 

37 

$16,238 

,500 

$935 

,382 

5 

.72           9.3 

2.33 

3 

1,214 

,000 

56 

,237 

4 

.63       11.82 

4.37 

19 

4,665 

,000 

215 

,910 

4 

.62       14.72 

0.46 

1 

68 

,000 

2 

,022 

2 

.97      

4 

1,115 

,000 

67 

,583 

6.11       15.25 

1.54 

11 

1,761 

,500 

61 

,328 

3 

.48         7.12 

1.05 

75 


$25,062,000     $1,338,466 
2,378,230 


Grand  total $27,440,230 


4.86 


EXHIBIT    "B" 

Table  Showing  Rates  of  Wharfage  Charged  by  24  Lessees  of  City- 
owned  Piers,  Compared  with  Cost  of  Berth  Space  Leased 


Lessee 
Eastern  S.S.  Corp  
Clyde  S.S.  Co  
Clyde  S.S.  Co  
Int.  M.  M  
Int.  M.  M  
Int.  M.  M  

North 
river 
piers 
19 

r.        44 

45 
58 
61 
,'.    "           62 
63 
69 
72 
74 
.                80 

Rent  and  charge 
per  berth  per  day 

berths         Rent        Charge 
2       $63  88           $350 
2         42  93             225 
4         42  93             225 
4         58  33            350 
4         58  33            350 
2         68  75             350 
1         57  50             250 
2       109  17             350 
2         86  27             125 
4         62  50             200 
4         15  75             300 
6       200  00             250 
2         15  42             150 
ST  RIVER 
2         55  00             225 
2         55  00            300 
2         55  00             300 
2         66  99             225 
2         66  99             225 
2         56  43             200 
2         16  66             200 
4         33  33             150 

BROOKLYN 
8         15  36             150 
8       110  42             275 
6         19  44             175 

Total 

Rental 
$127  76 
85  86 
171  72 
233  32 
233  32 
137  50 
57  50 
218  34 
172  54 
250  00 
63  00 
1,200  00 
30  84 

110  00 
110  00 
110  00 
133  98 
133  98 
112  86 
33  33 
133  66 

122  88 
883  36 
116  64 

Charge 
$700 
450 
900 
1,400 
1,400 
700 
250 
700 
250 
800 
1,200 
1,500 
300 

450 
600 
600 
450 
450 
400 
400 
600 

1,200 
2,200 
1,050 

Amer.  Cuban  S.S.  Co  
Occidental  Dock  Co  
N.  Y.  Central  
France  &  Canada  S.S.  Co  
Cen.  R.R.  of  N.  J  

Oriental  Nav.  Co  
Man.  Term  Co 

V               86 
.     131st  st. 

EA 

8 
g 

Spanish  Line.  . 

Munson  S.S.  Co  . 

Munson  S.S.  Co  
N.  Y.  &  Cuba  Merc  
N.  Y.  &  Cuba  Merc  

10 
13 
14 

D.  L.  &  W.  R.R.  ... 

26 

Seaboard  &  Gulf  S.S  

32 

Maritime  S.  Co  

72 

Fabre  Line  
Luckenbach  

.       31st  st. 
33rd  st 

U.  S.  Steel  Prod  

29th  st 

24  piers 


79 


$4,982  39     $18,950 


KEPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  29 

EXHIBIT    "  C  " 

Table  Showing  Rates  of  Wharfage  Charged  by  Stevedores  and 
Intermediaries  for  Public  Pier  Wharfage,  for  which  the  City 
Received  Prescribed  Rates,  as  Shown 

Profit 
to  inter- 
mediary 

on 
Paid  city  at  city  rates       Charged  ship       amount 

Pier  1,  North  river  (shedded)  Per  day  Total  Per  day       Total        city 

United  American  Line — To  New  York  Mari- 
time   Service.     S.S.    Bearport,    9/24-14/20, 

incl.,  21  days.     Charges  made  for  19  days 

account  of  reduction  in  tonnage  stored  on 

pier.     3,729  net  tons $130  52  $2,479  88         $200     $3,800  54% 

Pier  69,  North  river  (open) 

Cosmopolitan  Steamship  Co.  to  Sabbatino  & 

Co.     S.S.    Pipestone   County    (3,434   tons), 

10/7/20-10/15/20,  9  days 2017         18153  50  450         150% 

Harris,  Magill  &  Co.  to  Sabbatino  &  Co.,  523 

Broadway,  S.S.  Western  Light  (3,504  tons), 

12/7-12/21/20,  4  days 2052  8208  60  240         200% 

James  W.  Elwell  &  Co.  to  United  Wharfage  & 

Storage    Co.     S.S.    Waukau    (3,796    tons), 

9/22-10/1/20,  9  days 2198         19782  75  675         240% 

Sudden  &  Christensen  to  Continental  Trans- 
portation Co.     S.S.  West  Hesseltine  (3,466 

tons),  2/23/21-3/3/21,  9  days 20  33         182  97  50  450         150% 

Cosmopolitan  Steamship  Co.  to  Sabbatino  & 

Co.     S.S.    Remus    (2,931    tons),    8/16/20- 

8/24/20,  9  days 1766         15894  50  450         170% 

M.  H.  Tracy  &  Co.  to  Richmond  Dock  Wharf- 
age &  Water  Co.     S.S.  West  Togus  (4,447 

tons),  9/20/20-9/21/20,  2  days 25  24  50  48  100  200         300% 

Pier  94,  North  river  (open) 

Cosmopolitan  Steamship  Co.  to  Sabbatino  & 

Co.     S.S.  Bellingham  (3,621  tons),  wharfage 

charges,  3/1/21-3/8/21, 8  days 21  10         168  80  50  400         137% 

Cosmopolitan  Steamship  Co.  to  Sabbatino  & 

Co.     S.S.  Eastern  Light  (4, 148  tons),  8/28/20 

to  9/7/20,  11  days 23  74        261  14  50          550         108% 

95th  street,  North  river  (open) 

Munson  Steamship  Line  to  C.  F.  Terrence  & 

Sons.     S.S.  Ausquam  (2,174  tons),  3/25/20 

to  3/31/20,  7  days 13  87          97  09  125          875        792% 

96th  street,  North  river  (open) 

Cosmopolitan    Shipping    Co.    to    Continental 

Transportation     Co.       S.S.     Poughkeepsie 

(3,987  tons),  12/10/20-1/9/21,  31  days 2244         69564  50       1,550         128% 

Cosmopolitan    Shipping    Co.    to    Continental 

Transportation     Co.       S.S.     Poughkeepsie 

(3,887  tons),  1/10/21-1/19/21,  9  days 2214         20196  50  450         129% 

07lh  street,  North  river  (open) 

Sudden  &  Christensen  to  Continental  Trans- 
portation Co.     S.S.  Crown  City  (3,417  tons), 

2/7/21-2/15/21,  8  days 2008         16064  50  400         150% 

Sudden  &  Ohristensen  to  New  York  Stevedore 

&   Ballast   Co.     S.S.    Haleakala,   2/26/21- 

3/2/21,    (4,512    tons),    5    days;    2/19/21- 

2/25/21,  7  days 2546         30672  50  600         100% 


30         INVESTIGATION  OF  AFFAIES  OF  .NEW  YORK  CITY 


Profit 
to  inter- 
mediary 

on 
Paid  city  at  city  rates       Charged  ship      amount 

~ — »      paid 

Pier  69,  East  river  (open)  Per  day  Total  Per  day       Total       city 

Black  Diamond  S.S.  Co.  to  Frank  J.  Hoey. 
S.S.  Polybius  (5,483  tons),  9/21/20-9/24/20, 

4  days 3042         12168  50  200  66% 

East  20th  street,  Manhattan  (open) 

Cosmopolitan  Shipping  Co.  to  Sabbatino  &  Co. 
S.S.  Pipestone  County  (3,434  tons),  7/6/20- 

7/9/20, 4  days 2017          8068  50          200         150% 

69th  street,  Brooklyn  (open) 

Cosmopolitan  Steamship  Co.  to  Sabbatino  & 
Co.  S.S.  Ossa  (3,003  tons),  7/10/20- 

7/13/20, 4  days 1802          7298  30  120  66% 

Cosmopolitan  Steamship  Co.  to  Sabbatino  & 
Co.  S.S.  Beliingham  (3,621  tons),  8/30/20- 

9/24/20,  26  days 21  00         548  60  30  780  44% 

Cosmopolitan  Steamship  Co.  to  Sabbatino  & 
Co.  S.S.  McKeesport  (4,122  tons),  7/1/20- 
7/7/20, 7  days 2361  16527  50  350  110% 


THIRD  REPORT 


REPORT   AND    RECOMMENDATIONS    ON    THE  BOARD 
OF  EDUCATION 


February  15,  1922 


[31] 


REPORT  AND  RECOMMENDATIONS  ON  THE  BOARD 
OF  EDUCATION 

February  15,  1922. 
To  the  Legislature: 

The  administration  of  the  public  schools  of  the  City  is  and 
for  years  has  been  weak  and  inefficient,  and  does  not  measure  up 
to  the  reasonable  requirements  of  the  school  children  of  the  City, 
or  the  expectations  and  desires  of  the  people  of  the  City,  or  of 
the  State  which  is  charged  with  ultimate  responsibility  for  main- 
taining efficient  and  adequate  common  schools  in  every  part  of 
the  State. 

The  deficiencies  are  apparent. 

A.     INADEQUATE  SCHOOL  ACCOMMODATIONS. 

In  December,  1917,  the  month  before  the  present  Board  of 
Education  took  office,  there  were  746,114  children  registered 
in  the  day  elementary  schools,  of  whom  34,153  were  on  part  time 
and  76,214  on  the  so-called  duplicate  form  of  organization.  In 
the  last  month  for  which  figures  are  now  available  there  were 
817,210  children  on  register  in  the  day  elementary  schools,  of 
whom  81.242  were  on  part  time  and  194,234  on  double  session. 

In  the  day  high  schools  there  were  58,063  registered  in  Decem- 
ber, 1917,  none  of  whom  were  on  double  session  and  only  1,796 
were  on  part  time.  In  October,  1921,  the  register  had  increased 
to  82,265  and  there  were  1,516  children  on  double  session  and 
33,892  on  part  time. 

These  figures  show  insufficient  school  accommodations  to  care 
for  the  growth  of  school  population. 

The  capacity  of  new  elementary  school  buildings  and  additions 
opened  during  the  past  four  years  is  as  follows : 

No.  of  New  Buildings  No.  of  Sittings 

Therein 

1,294 
1,380 
None 
19  203 


Year 
1918        

or  Additions  Opened 

2 

1919 

4 

1920  

None 

1921  to  Dec   6 

.      ..                           16* 

Total  .  22  21,877 


Of  the  16  opened  in  1921,  all  but  two  were  opened  after  September  1st. 

2 


34         INVESTIGATION  OF  AFFAIRS  OF  ^"EW  YORK  CITY 


During  the  preceding  four  years,  44  new  elementary  buildings 
or  additions  were  opened,  with  52,847  sittings,  a  better,  but  still 
inadequate  showing. 

This  unfortunate  condition  is  only  partly  due  to  lack  of  appro- 
priations. Exasperating  delays  and  .a  shifting  policy  are  equally 
responsible.  The  total  corporate  stock  authorizations  from  Janu- 
ary 1,  1910,  to  June  30,  1921,  for  school  buildings  amounted  to 
$68,744,732.11,  while  the  expenditures  during  the  same  period 
amounted  to  only  $46,092,839.88.  Fifteen  million  of  this 
authorization  was  made  in  1921,  but  the  ten  million  authoriza- 
tion of  earlier  years  was  revoked  on  December  30,  1918,  without 
the  expenditure  of  any  part  of  it  in  the  meantime,  and 
was  subsequently  appropriated  for  the  same  purposes  for  which 
it  was  originally  designed.  This  resulted  in  holding  up  the  build- 
ing program  at  the  time  of  its  greatest  need.  A  detailed  state- 
ment of  the  authorizations  and  cash  expenditure  from  1910  to 
1921  will  be  found  on  page  38  of  the  appendix. 

It  will  be  noted  that  the  expenditures  of  the  three  and  a  half 
years,  1918  to  July,  1921,  were  but  $15,224,331.97,  which,  in 
view  of  the  depreciated  value  of  the  dollar,  represents  not  more 
than  $8,000,000  in  building  value  on  the  basis  of  1910  to  1917, 
or  about  one-half  of  the  previous  four-year  totals. 

The  average  annual  authorization  for  the  eleven  and  a  half 
years  covered  in  the  annexed  table  was  $5,977,802.79  and  the 
average  annual  expenditure  $4,008,073.03. 

The  inadequacy  of  school  buildings  has  inevitably  resulted  in 

(1)  Inadequate  instruction,  keeping  scholars  on  part  time. 

(2)  Overcrowding  of  the  school  buildings  with  resulting  danr 
ger  to  sanitation  and  health. 


B.     FIRE  HAZARDS. 

In  August,  1921,  there  were  7,353  violations  of  fire  prevention 
rules  recorded  against  496  of  the  City's  695  school  build- 
ings. The  estimated  cost  of  removing  these  violations  is  about 
$4,500,000.  Some  of  the  violations  are  serious,  as,  for  example, 
stairways  that  are  not  enclosed  with  fire  and  smoke-proof  parti- 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  35 

tions  and  not  provided  with  self-closing  doors ;  interior  fire  alarm 
systems  that  do  not  work;  wooden  and  not  self-closing  fireproof 
doors  along  the  line  of  exit  stairways ;  no  hand  fire  extinguishers ; 
and  storage  of  dangerously  inflammable  materials  in  non-fireproof 
rooms  or  compartments.  The  Superintendent  of  School  Build- 
ings wrote  the  Board  of  Education,  March  23,  1921,  as  follows: 

"  This  with  the  continued  growth  of  the  schools  and  con- 
sequent overcrowding  and  congestion  causes  me  great  uneasi- 
ness and  distress  of  mind.  If  the  fire  prevention  work  was 
and  is  required  for  schools  under  normal  conditions,  how 
much  more  important  must  it  he  when  a  building  contains 
quite  one-half  or  more  in  excess  of  the  normal  .  .  .  why 
paint  and  renovate  the  interior  of  a  building  when  there  are 
essential  items  of  fire  prevention  work  to  be  performed  which 
would  actually  operate  to  safeguard  life  and  lessen  fire 
risk  ?  " 

The  total  authorizations  and  expenditures  for  fire  prevention 
work  since  September  16,  1904,  is  as  follows: 

Date  of  Amount  of 

Authorization  Authorization  Expenditures  Balance 

Sept.     16,  1904 $300, 000  00  $300, 000  00      

550,  000  00  550,  000  00      

April      3,  1908 1, 000, 000  00  1, 000, 000  00      

June       3,  1910 450, 000  00  450, 000  00      

July     17,1911 450,00000  447,66659  $2,33341 

Nov.      19,1915 250,00000  250,00000     

July        7,1916 250,00000  250,00000      

April    20,  1917 250,000  00  240,660  85  9,339   15 

April    22,1921 250,00000      250,00000 

C.     NEGLIGENT  ADMINISTRATION". 

Other  deficiencies  of  administration  appear  from  the  failure 
to  repair  the  education  building,  and  the  condition  of  by-laws  and 
minutes  of  the  Board  of  Education.  In  February,  1918,  the 
seventh,  eighth  and  ninth  floors  of  the  Hall  of  the  Board  of  Edu- 
cation, at  500  Park  Avenue,  housing  the  executive  offices  of  the 
Board,  were  burned  out.  Bids  for  the  rebuilding  of  these  floors 
were  not  opened  until  December  7,  1921,  nearly  four  years  after 
the  fire.  During  this  interval  the  work  of  the  Board  has  been 
seriously  interfered  with  because  of  compulsory  vacancy  of  the 
three  top  floors  of  its  building.  The  Bureau  of  School  Buildings 
had  to  be  moved  to  inadequate  quarters  in  the  Municipal  Build- 
ing, several  miles  away  from  the  other  offices  of  the  Board.  The 


36         INVESTIGATION  OF  AFFAIRS  OF  ,NEW  YORK  CITY 

delay  in  agreeing  on  new  plans,  in  securing  an  appropriation  and 
in  letting  the  contract  is  open  to  serious  criticism.  No  business 
corporation  would  tolerate  such  methods.  See  testimony  of 
President  of  Board  of  Education,  vol.  3,  p.  1321. 

The  law  of  1917  so  changed  the  organization  of  the  school  sys- 
tem that  a  complete  revision  of  the  by-laws  was  necessary  in  order 
to  make  them  conform  with  the  new  statute.  This  revision  has 
not  been  made.  A  few  sections  were  revised  but  the  bulk  of  the 
by-laws  was  still  in  the  form  of  a  large  octavo  volume  published 
in  1914  with  hundreds  of  amendment  slips  pasted  in,  many  of 
which  antedate  the  law  of  1917. 

The  minutes  of  Board  meetings  are  records  of  great  im- 
portance to  teachers,  board  members,  board  officers  and  city 
authorities,  as  they  have  the  force  of  law  within  the  scope  of  the 
powers  delegated  to  the  Board  of  Education  by  the  Legislature. 
The  last  volume  of  minutes  to  be  furnished  with  a  printed  index 
is  that  for  1915.  The  minutes  of  board  meetings  are  not  or- 
dinarily available  until  two  months  after  the  meeting. 

Such  conditions  could  not  exist  with  a  capable  Board.  They 
have  failed  not  only  in  matters  wholly  in  their  control,  but  they 
show  no  capacity  to  secure  effective  administration  through  the 
co-operation  of  other  governmental  agencies  on  which  they  de- 
pend, or  to  secure  the  enactment  of  better  laws  by  inspiring  public 
confidence  and  arousing  public  opinion.  They  have  shown  little 
or  no  capacity  for  leadership  for  many  years  in  the  discharge  of 
the  important  trust  confided  to  them. 

Unsound  Legislation. 

Responsibility  for  such  conditions  may  not  be  easily  appor- 
tioned. It  doubtless  rests  primarily  on  the  system  of  making 
purely  political  appointments  to  the  Board  of  Education.  Such 
appointments  are  made  without  any  check  of  non-partisan  ap- 
proval or  confirmation.  Each  incoming  mayor  seeks,  and  usually 
gains,  a  large  degree  of  political  control  over  the  Board  of  Educa- 
tion. The  members  of  the  present  Board  were  all  appointed  by 
the  present  Mayor  under  the  amendment  of  1917.  Such  political 
appointments  are  in  strict  accord  with  the  ancient  plan  of  dele- 
gating educational  functions  to  localities,  but  the  State  has 
largely  outgrown  and  changed  the  system  by  increasing  State 
power  over  local  administration,  while  furnishing  State  aid  to 
meet  new  requirements  imposed  by  law.  The  old  system  is  not 


REPORT  OF  JOIXT  LEGISLATIVE  COMMITTEE  37 

adapted  in  principle  to  a  municipality  like  New  York.  State 
jurisdiction  over  schools  is  exercised  by  the  University  of  the 
State,  which  is  non-partisan  in  its  organization  and  spirit.  Some 
plan  should  be  devised  for  the  creation  of  an  equally  non-partisan 
and  representative  body  in  the  City. 

Apart  from  this  basic  fault,  it  is  desirable  to  review  some 
specific  faults  of  organization,  which  should  be  removed  to  give 
assurance  that  a  competent  board  could  successfully  discharge 
its  duty. 

1.  COMPLICATED  AND  ANTIQUATED  PROVISIONS 
OF  LAW  REQUIRING  THE  CO-OPERATION  OF  MANY 
OTHER  BRANCHES  OF  THE  CITY  GOVERNMENT  IN 
BUILDING  OPERATIONS  WITH  RESULTING  DELAYS, 
OFTEN  AMOUNTING  TO  A  VETO  OF  A  BUILDING 
PROJECT. 

The  first  and  most  important  of  these  objectionable  provisions 
is  the  provision  of  law  making  the  Board  of  Education  dependent 
upon  the  action  of  the  Board  of  Estimate  and  the  Sinking  Fund 
Commission  for  appropriations  and  acquisitions  of  sites  for 
school  houses.  There  is  a  general  concurrence  in  the  necessity  of 
making  the  Board  of  Education  independent  in  this  respect.  It 
may  therefore  be  assumed  that  there  is  but  one  opinion  upon  the 
subject,  and  that  the  necessity  is  great.  The  Committee  inquired 
with  particularity  as  to  the  steps  required  to  be  taken  to  build  a 
school  house,  and  found  that  there  were  at  least  twenty-seven, 
each  one  involving  considerable  delay  and  the  whole  practice 
likely  to  discourage  those  who  were  engaged  in  the  undertaking. 
Most  of  them  are  unnecessary  for  the  protection  of  the  City's 
interest,  and  hinder  the  prompt  building  of  school  houses.  An 
exhibit  showing  these  steps  in  detail  will  be  found  on  page  36 
of  the  appendix. 

In  two  instances  it  was  found  that  twenty  years  or  more  had 
elapsed  from  the  time  the  recommendation  for  a  new  building 
was  made  by  a  local  school  board  and  the  time  when  the  building 
was  opened  for  use.  P.  S.  No.  54,  Brooklyn,  for  example,  was 
recommended  by  the  school  board  of  Brooklyn  in  1901 ;  the  con- 
tract date  for  its  completion  is  September,  1922. 

Examination  of  the  record  of  some  twenty  schools  on  the  cur-- 
rent building  program  shows  that  plans  and  specifications  were 
before  the  Board  of  Estimate  in  one  instance  for  356  days,  an- 


38         INVESTIGATION  OF  AFFAI?*?  OF  NEW  YOEK  CITY 

other  for  211  days,  and  in  eight  cases  for  more  than  50  days. 
This  did  not  take  into  account  the  time  between  the  return  by 
the  Board  of  Estimate  and  a  resubmission  by  the  Board  of  Edu- 
cation. In  one  case  the  same  matter  was  four  times  before  the 
Board  of  Estimate.  In  four  other  cases  the  same  matter  was 
before  the  Board  of  Estimate  three  times. 

2.  STATUTORY  POWERS  PROPERLY  BELONGING 
TO  THE  BOARD  OF  EDUCATION  NOW  VESTED  IN 
BODIES  OR  OFFICIALS  NOMINALLY  SUBORDINATE 
TO  THE  BOARD  BUT  IN  FACT  SUPERIOR  IN  RESPECT 
OF  SUCH  POWERS. 

The  superintendent  of  schools,  the  Board  of  Superintendents, 
and  the  Bureau  of  Compulsory  Education,  all  have  a  fixed  tenure 
of  office,  and  although  chosen  by  the  Board,  possess  important 
powers  of  administration  which  are  exercised  independently  of 
and  often  in  opposition  to  the  desires  of  the  Board  itself. 

It  is  unnecessary  to  enumerate  these  important  powers  which 
are  readily  referred  to  in  the  statute,  and  have  been  frequently 
the  cause  of  conflict  between  the  boards  and  officials  named  and 
the  Board  of  Education.  Many  of  these  powers  are  among  the 
most  important  exercised  in  the  administration  of  the  schools. 

3.  FREQUENT  CHANGES  AND  CONFLICT  OF  LAWS 
GOVERNING  THE  ADMINISTRATION  OF  SCHOOLS. 

The  Board  of  Education  originally  consisted  of  nineteen  mem- 
bers. It  was  changed  in  1901  to  forty-six  members,  and  in  1917 
to  seven  members.  The  charter  was  radically  revised  in  1897 
and  in  1901,  and  its  provisions  extensively  modified  by  amend- 
ments to  the  State  Education  Law  in  1917,  each  change  involving 
important  changes  in  the  plan  of  administration  of  the  schools 
and  their  relation  to  other  city  agencies  and  the  State.  A  com- 
parative statement  of  the  principal  changes  effected  by  the  statute 
of  1917  in  the  law  of  1901  will  be  found  on  page  22  of  the 
appendix. 

Under  the  act  of  1917  conflicts  have  arisen  by  reason  of  the 
uncertainty  of  the  law  between  the  Board  of  Education  and  the 
Commissioner  of  Education  at  Albany,  between  the  Board  of 
Education  and  the  municipal  authorities  relative  to  their  respect- 
ive powers,  and  between  the  Board  of  Education  and  the  superin- 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  39 

tenclent  of  schools,  if  not  between  the  Board  of  Education  and 
the  Board  of  Superintendents  and  associate  superintendents. 

There  has  been  a  failure  to  concentrate  in  clear  and  unmis- 
takable language  the  full  responsibility  for  the  administration  of 
the  public  school  system  on  the  Board  of  Education,  the  municipal 
authorities,  or  the  State.  Groping  for  a  remedy  they  have  found 
none  because  the  fundamental  error  of  appointing  a  political 
Board  of  Education  has  remained. 

Finances. 

Fortunately  the  financial  statement  for  education  in  the  City 
is  not  complicated.  The  expenditures  since  1910  have  been  as 
follows : 

Year  Expenditures. 

1910 $28,456,945  08 

1911  28,958,179  29 

1912  33,791,974  40 

1913  35,481,641  12 

1914  38,185,495  90 

1915  39,797,960  64 

1916  39,708,764  22 

1917  41,101,074  41 

1918  43,884,893  59 

1919  45,490,121  68 

1920  66,194,668  04 

1921  (first  6  mos.) 44,828,326  69 

1922  (budget) *88,798,546  81 

The  normal  increase  for  the  years  1920,  1921  and  1922  has 
been  augmented  by  the  Lockwood-Donohue  act  in  the  sum  of 
$30,000,000.  This  has  been  devoted  to  the  pay  of  teachers.  The 
annual  normal  increase  may  be  roughly  taken  as  $2,000,000. 

The  apportionment  of  State  moneys  to  the  City  since  1914  has 
been  as  follows : 


*  Including  $18,097,534.51  from  the  State. 


40         INVESTIGATION  OF  AFFAIKS  OF  IN~EW  YORK  CITY 

Amount  Apportioned 
Year  to  ^ie  &•*!! 

1914 $1,923,025  00 

1915  '.'.'.'.'.'.'.'.'. 2,115,679  73 

3916  2,220,730  03 

1917  2,414,837  16 

1918  2,321,191  13 

1919  2.700.657  10 

1920  5,025,570  17 

1921  .  . 16,938.023  R/. 

1922   *18,097,534  51 

The  increase  of  apportionment  for  1922  over  1919,  the  period 
during  which  the  mandatory  increase  due  to  legislation  has  oc- 
curred, has  been  about  $15,000,000,  or  one-half  of  the  amount  of 
the  increased  charge  due  to  these  laws. 

The  City  complains  of  the  increase  effected  by  law.  As  educa- 
tion is  a  State  function,  although  commonly  delegated  to  munici- 
palities, it  would  appear  that  when  the  State  interferes  to  increase 
the  cost  of  education  in  so  considerable  an  amount,  it  should  pro- 
vide ways  and  means  for  defraying  such  additional  expenses  with- 
out embarrassment  to  the  municipalities.  The  State's  taxing 
power  is  unlimited,  and  it  is  a  matter  of  comparative  indifference 
to  any  part  of  the  State  whether  the  funds  for  education  are 
raised  by  State  or  local  tax. 

The  constitution  limits  the  debt  incurring  power  of  cities  to  ten 
per  cent  of  the  assessed  value  of  real  estate,  and  the  taxing  power 
to  two  per  cent  of  the  assessed  value  of  real  and  personal  property. 
These  limitations  which  are  proper  and  useful,  were  enacted  with 
reference  to  the  normal  expense  for  education.  Such  increase  in 
cost  is  the  result  of  a  change  of  policy  in  the  entire  State  as  to  the 
standard  of  teaching,  which  it  is  expected  will  be  much  improved 
!;y  making  the  teachers'  profession  more  attractive.  It  is  true  that 
i hip  augmented  cost  was  favored  by  substantially  all  the  members 
of  the  legislature  from  the  City,  and  the  present  administration  of 
the  City  claims  to  have  favored  it ;  but  it  was  done  by  .State  author- 
ity, and  the  Committee  finds  no  evidence  tending  to  show  that  the 
additional  expense  would  in  fact  have  been  incurred  in  the  absence 
of  legislative  enactment.  It  doubtless  seems  strange  to  one  un- 
familiar with  the  real  financial  situation  of  the  City  and  such  an 


Estimated. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  41 

increased  charge  du ;ukl  he  a  source  of  embarrassment.  The  City 
lias  a  debt  incurring  capacity  of  more  than  a  billion  dollars,  a 
taxing  capacity  of  more  than  two  hundred  million  dollars,  and  an 
unencumbered  income  of  more  than  sixty  millions.  But  by  reason 
of  the  course  of  past  and  present  administrations,  the  City  has  been 
for  sonic  years  past  near  its  debt  limit,  if  it  has  not  exceeded  it, 
and  grave  question  exists  as  to  its  having  exceeded  its  tax  limit  in 
the  last  two  annual  assessments. 

In  preparing  the  budget  for  1921,  the  City  under  claim  of  neces- 
sity, omitted  $27,000,000  from  the  school  appropriation,  and  met 
it  afterwards  by  special  revenue  bonds,  and  other  devices,  throwing 
most  of  the  charge  over  on  to  the  year  1922.  The  Comptroller  ad- 
vised striking  ten  million  dollars  from  the  1922  budget  for  educa- 
tion on  the  ground  that  otherwise  the  tax  imposed  would  exceed 
the  constitutional  limit.  It  is  unadvisable  at  present  to  increase 
charges  upon  the  City  and  it  would  seem  to  be  desirable  for  the 
State  to  establish  a  plan  of  appropriations  increasing  annually 
until  it  is  sufficient  to  meet  the  additional  charge  for  education  it 
has  created  since  1920. 

While  this  report  is  confined  to  matters  relating  to  the  City  of 
!N"ew  York,  there  is  a  like  situation  in  other  parts  of  the  State,  and 
the  problem  of  providing  for  the  cost  of  education  under  these 
laws  will  require  solution  in  other  important  muncipalities.  It  is 
therefore  a  State  as  well  as  a  City  issue. 

The  legislature  has  from  time  to  time  fixed  a  mandatory  tax  for 
school  purposes  in  the  City.  It  fixed  the  tax  at  four  mills  in  1898, 
three  mills  in  1903,  and  4.9  mills  in  1917.  These  charges  were 
made  in  the  exercise  of  State  authority  to  insure  the  maintenance 
of  schools,  but  they  may  be  regarded  as  representing  a  minimum 
below  which  the  cost  of  education  may  not  be  reduced  rather  than 
as  an  attempt  to  increase  the  expenditure.  For  the  most  part  the 
City  has  made  considerable  and  in  many  instances  large  appropria- 
tions for  schools  in  excess  of  the  mandatory  tax. 

NON-POLITICAL  BOARD  OF  EDUCATION. 

The  problem  of  securing  a  Board  of  Education  for  the  City 
which  shall  stand  for  education  free  from  political  considerations, 
is  the  fundamental  one.  As  the  University  of  the  State  is  the 
State-wide  instrument  of  control  in  education  the  members  of 
the  University  of  the  State  resident  in  the  City,  now  four  in 
number,  can  with  the  Mayor  who  should  be  chairman  of  the 


42         INVESTIGATION  OF  AFFAIRS  OF  NEW  YOEK  CITY 

Commission,  be  drafted  into  service  as  a  Commission  to  appoint 
members  of  the  City  Board  of  Education.  This  will  give  local 
recognition  by  requiring  all  members  of  the  Commission  to  reside 
in  the  city.  By  taking  over  as  members  of  the  Commission  resi- 
dents of  the  city  who  are  members  of  the  Board  of  Regents  it 
will  insure  the  performance  of  the  State's  obligation  and  duty 
in  education,  now  greatly  increased  by  the  added  burden  of  cost 
which  the  State  assumes.  But  more  important  than  all  else,  it 
will  take  politics  out  of  schools. 

RECOMMENDATIONS 

1.  The  Committee  recommends  that  the  Board  of  Education  of 
the  City  of  New  York  consist  of  members  appointed  by  the  Com- 
mission as  provided  in  this  report. 

2.  That  the  Board  of  Education  be  granted  complete  inde- 
pendence from  all  municipal  control  in  the  acquisition  of  real 
property  for  school  purposes,  by  purchase,  condemnation,  lease 
or  otherwise,  within  the  limit  of  the  funds  available  therefor. 

3.  That  the  Board   of  Education  be  granted  complete   inde- 
pendence from  all  municipal  control  in  the  construction,  alteration 
and  repair  of  school  buildings,  provided  that  its  superintendent  of 
school  buildings,  before  starting  work,  certify  in  writing  that  the 
plans  and  specifications  comply  with  the  building  and  electrical 
codes   and   the  laws   of  the   State;    and   provided   further   that 
occupancy   shall  not  be   permitted  until  the   superintendent   of 
school  buildings  shall  have  certified  that  the  building  as  com- 
pleted complies  with  the  building  and  electrical  codes  and  the 
laws  of  the  State,  but  without  disturbing  the  City's  jurisdiction 
as  to  fire  prevention. 

4.  That  the  Board  of  Education  be  granted  complete   inde- 
pendence from  all  municipal  control  in  the  administration  and 
expenditure  of  all  school  moneys,  subject  only  to  audit  by  the 
Comptroller  of  the  City  for  the  purpose  of  preventing  fraud  or 
error. 

5.  That  the   City  be   required  to   appropriate  in   its   annual 
budget  amount  which  together  with  the  school  moneys  which  are 
apportioned  to  the  City  by  the  State,  will  equal  the  budget  appro- 
priation for  schools  in  the   City  for  the  year  1922    ($88,798,- 
546.81)  plus  an  annual  increase  of  two  million  dollars  as  repre- 
senting the  normal  increase  of  cost ;  that  the  present  authorization 


KEPOET  OF  JOINT  LEGISLATIVE  COMMITTEE  43 

for   building   school   houses   be   not    revoked   and   that   at  least 
$6,000,000  be  authorized  annually  for  this  purpose. 

6.  That  the   State  provide  for  a  graduated  increased   appro- 
priation for  schools  until  the  amount  apportioned  for  the  City 
of  New  York  shall  be  increased  fifteen  million  dollars  over  the 
amount  apportioned  in  1922. 

7.  That  sections  of  the  greater  New  York  Charter  inconsistent 
with  the  provisions  of  the  education  law  be  repealed. 

And  the  Committee  further  recommends  that  as  soon  as  the 
Board  of  Education  is  reconstituted  under  the  foregoing  recom- 
mendations that  the  powers  of  the  Board  be  increased  as  follows : 

8.  That  the  Board  of  Education  be  constituted  the  fiscal  and 
policy  determining  head  of  the  school  system  with  power  to  dele- 
gate authority  to  the  Superintendent  of  Schools,  as  it  may  deem 
wise. 

9.  That  the  Board  of  Education  be  granted  power  to  establish, 
abolish  or  consolidate  such  boards,  bureaus  and  divisions  as  it 
may  deem  necessary  excepting  only  the  Board  of  Examiners. 

10.  That  the  Superintendent  of  Schools  and  all  other  officers 
and  employees  derive  their  power  and  authority  from  the  by-laws 
of  the  Board  of  Education,  subject  only  to  the  provisions  of  the 
Education  Law. 

Respectfully  submitted, 

SCHUYLER    M.    MEYER,    Chairman. 
THEODORE   DOUGLAS   ROBINSON. 
FREDERICK  W.  KAVANAUGH. 
MAXWELL   S.   HARRIS, 
SIMON  L.  ADLER. 
SOL  ULLMAN. 
JOHN  R.  YALE. 
WALTER  W.  WESTALL. 
ELON  R.  BROWN,   Counsel. 

I  subscribe  to  the  Committee's  recommendations  except  that  I 
do  not  believe  that  the  power  of  appointment  of  members  of  the 
Board  of  Education  should  be  exercised  by  officials  elected  or 
appointed  outside  of  the  City  of  New  York.  Irrespective  of 
their  residence,  the  Regents  are  elected  by  the  Legislature.  I 
favor  confirmation  of  appointments  by  the  Mayor  to  the  Board 
of  Education  by  either  the  Board  of  Aldermen  or  by  the  Board 
of  Finance  suggested  in  the  Committee's  first  report. 

THEODORE  STITT. 


APPENDIX 


EDUCATION  UNDER  THE  GREATER  NEW  YORK  CHARTER. 

The  union  into  one  municipality  under  the  corporate  name  of 
the  City  of  New  York  of  "  the  various  communities  lying  in  and 
about  New  York  harbor,  including  the  City  and  County  of  New 
York,  the  City  of  Brooklyn  and  the  County  of  Kings,  the  County 
of  Richmond  and  part  of  the  County  of  Queens,"  effected  by 
Chapter  378  of  the  Laws  of  1897,  brought  together  into  one 
fabric  the  various  different  threads  of  educational  policy  which 
had  been  spun  by  the  separate  statutory  provisions  enacted  by 
the  State  Legislature  for  the  benefit  of  the  several  communities. 

These  had  been  and  were  of  the  most  diverse  character,  ancl 
the  recognition  in  the  new  charter  of  many  of  these  local  peculiari- 
ties, in  response  doubtless  to  strong  local  pressure  to  perpetuate 
a  time-honored  custom  or  to  assure  a  continuance  in  office  to  some 
local  officer,  made  the  educational  sections  of  the  new  instrument 
complex  and  not  simple  affairs. 

At  the  time  of  consolidation,  for  example,  the  old  City  of  New 
York  had  a  Board  of  Education  of  21  members  appointed  by  the 
Mayor.  The  City  of  Brooklyn  had  a  Board  of  Education  of  45 
members  appointed  by  the  Mayor.  In  what  became  the  Boroughs 
of  Queens  and  Richmond,  there  were  'many  independent  school 
organizations  based  on  town  or  school  district  lines. 

The  new  charter  sought  to  recognize  local  .sentiment.  It  con- 
tinued the  Board  of  Education  of  the  former  City  of  New  York 
as  the  School  Board  for  the  Boroughs  of  Manhattan  and  The 
Bronx.  It  continued  the  Board  of  Education  of  the  former  City 
of  Brooklyn  as  the  School  Board  for  the  Borough  of  Brooklyn, 
and  it  substituted  in  each  of  the  new  Boroughs  of  Queens  and 
Richmond,  a  Borough  School  Board  of  9  members  for  the  various 
pre-existing  local  school  organizations.  This  arrangement  gave 
each  borough  a  School  Board  with  very  considerable  powers  over 
the  schools  of  the  borough.  In  addition,  provision  was  made  for 
a  Board  of  Education  of  19  members,  consisting  of  the  4  Chair- 
men of  the  4  Borough  School  Boards,  10  delegates  elected  from 

[45] 


46         INVESTIGATION  OF  AFFAIES  OF  ~N"EW  YORK  CITY 

its  membership  by  the  School  Board  of  Manhattan  and  The 
Bronx,  and  5  delegates  chosen  similarly  by  the  School  Board  of 
Brooklyn.  This  Board  of  Education  was  constituted  a  separate 
corporation  and  was  made  the  head  of  the  Department  of  Educa- 
tion, set  up  as  one  of  the  administrative  departments  of  the  City. 

The  new  Board  did  not  enjoy  the  same  degree  of  independence 
as  its  predecessors.  On  the  administrative  side,  many  powers 
previously  possessed  by  the  Boards  of  Education  were  given  to 
the  Borough  School  Boards.  On  the  financial  side,  there  had 
been  a  gradual  growing  away  from  the  original  idea,  whereby 
local  school  authorities  were  independent  of  municipal  author- 
ities. The  Act  of  1851,  for  example,  had  given  the  Board  of 
Education  corporate  powers  and  had  invested  it  with  full  control 
of  the  common  schools  with  power  to  take  and  hold  property, 
secure  proper  accountability  in  the  expenditure  of  school  moneys 
and  administer  the  funds  derived  from  the  city  and  State.  No 
municipal  control  was  incidental  thereto,  for  the  supervisors  of 
the  city  and  county  were  required  to  raise,  for  educational  pur- 
poses, certain  sums  easily  ascertainable  under  the  law,  and  "  such 
additional  sum  or  sums  as  the  Board  of  Education  *  *  * 
shall  have  reported  to  be  necessary."  This  gave  the  Board  of 
Education  a  position  of  peculiar  independence  in  relation  to  the 
fiscal  authorities  of  the  City  of  New  York,  but  during  the  next 
46  years,  this  independence  was  steadily  and  increasingly 
impaired. 

The  Board  of  Education  of  1898  had  very  little  financial 
power.  It  was  made  the  head  of  a  department  of  the  city  gov- 
ernment, and  by  section  1059,  the  City  was  given  the  power  to 
determine  the  amount  of  money  to  be  allowed  from  the  tax  levy 
for  the  support  of  the  schools.  About  the  only  financial  functions 
remaining  to  the  Board  were  the  allotment  of  funds  to  the 
boroughs  on  the  basis  of  school  population  and  the  number  of 
teachers  employed,  and  the  control  of  the  special  school  fund. 

The  educational  chapter  of  the  charter  of  1897  represents  an 
attempt,  similar  to  attempts  made  before  and  since,  to  reconcile 
two  hopelessly  conflicting  theories.  The  schools  cannot  be  both 
independent  and  subject  to  municipal  control,  and  yet  the  Legis- 
lature has  repeatedly  enacted  laws  by  which  it  has  endeavored  to 
make  this  paradox  work.  The  school  authorities  have  fought  to 
preserve  every  right  they  ever  enjoyed  and  the  city  authorities 
have  sought,  with  equal  vigor,  to  supervise  and  control  the  expendi- 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  47 

tare  of  city  funds  appropriated  by  them  for  school  purposes.  A 
clear,  consistent  and  uncompromising  enactment  by  the  Legisla- 
ture, settling  the  many  points  of  controversy,  would  go  far  to 
improve  school  conditions  in  New  York  City. 

The  charter  of  1897  was  soon  radically  revised.  Its  successor 
was  Chapter  466  of  the  Laws  of  1901,  and  the  educational  chap- 
ter of  that  instrument  was  until  1917  the  basis  for  the  administra- 
tion of  the  City's  public  schools. 

The  Department  of  Education  was  continued  as  one  of  the 
administrative  departments  of  the  City,  and  the  Board  of  Edu- 
cation was  placed  at  its  head.  The  former  Borough  School  Boards 
were  abolished  and  the  size  of  the  Board  of  Education  increased, 
to  provide  for  borough  representation.  The  new  Board  consisted 
of  46  members,  appointed  by  the  Mayor  for  five  year  terms,  as 
follows : 


22  residents  of  Manhattan. 

4  residents  of  The  Bronx. 

14  residents  of  Brooklyn. 

4  residents  of  Queens. 

2  residents  of  Richmond. 


The  Board  was  given  corporate  privileges.     Among  other  sig- 
nificant provisions  of  the  new  law  were  the  following : 

The  Board  of  Education  was  to  succeed  to  all  the  powers 
of  the  former  Board  of  Education  and  Borough  School 
Boards. 

The  Board  of  Education  was  to  administer  all  moneys 

I       available  for  educational  purposes. 
The  Board  of  Education  had  the  power  to  lease  property 
and  make  contracts. 
The  Board  of  Education  had  the  power  to  appoint  certain 
officers  and  clerks  and  to  fix  their  salaries,  and  to  appoint 
and  fix  the  salaries  above  certain  minimums  of  members  of 
the  teaching  and  supervising  force. 

There  was  to  be  a  Board  of  Superintendents,  consisting 
of  the  City  Superintendent  and  8  Associate  Superintendents, 
the  latter  to  consist  of  the  4  Borough  Superintendents  and  of 
4  persons  selected  from  the  Associate  Bcrough  Superintend- 
ents, each  to  hold  office  until  the  expiration  of  the  term  for 
which  he  had  originally  been  appointed. 


48         INVESTIGATION  OF  AFFAIRS  OF  ^"EW  YOKK  CITY 


There  were  to  be  26  District  Superintendents,  including 
all  the  Associate  Borough  Superintendents  not  appointed  to 
the  Board  of  Superintendents. 

There  were  to  be  46  local  school  boards,  each  consisting 
of  a  member  of  the  Board  of  Education  assigned  by  the 
President  of  the  Board,  the  District  Superintendent  of  the 
district  and  5  persons  appointed  by  the  Borough  President. 

There  was  to  be  a  Board  of  Examiners,  to  examine 
candidates  for  teachers'  licenses. 

The  City  was  required  to  supply  the  Board  of  Education 
with  funds  for  school  purposes  annually,  amounting  to  not 
less  than  4  mills  on  the  dollar  of  assessed  valuation. 

The  Department  of  Einance  was  given  authority  to  audit 
the  Board's  accounts. 

The  provisions  of  this  law  respecting  the  organization  of  the 
school  system  remained  substantially  the  same  during  the  entire 
life  of  the  educational  section  of  the  charter,  but  the  powers  of 
the  Board  of  Education  were  increasingly  impaired.  Special  sal- 
ary laws  were  passed  by  the  Legislature,  which  in  effect  deprived 
the  Board  of  practically  all  control  over  teachers'  salaries.  By 
Chapter  43  of  the  Laws  of  1903,  the  amount  which  the  City 
must  annually  make  available  for  school  purposes  was  reduced 
from  4  mills  to  3  mills  contemporaneously  with  an  increase  in  the 
assessed  valuation  of  such  magnitude  that  the  yield  of  the  3-mill 
tax  was  greater  than  the  yield  of  the  4-mill  tax.  Both  amounts 
were,  however,  inadequate,  so  that  the  Board  of  Estimate  and 
Apportionment  substantially  controlled  the  Board  of  Education's 
finances  by  conditioning  additional  appropriations  upon  the  obser- 
vance of  the  Board  of  Estimate's  rules  and  regulations  regarding 
the  segregation  of  appropriations  and  accounting  control.  The 
tendency  grew  to  regard  the  Department  of  Education  as  a  regu- 
lar department  of  the  city  government  and  the  Legislature  made 
little,  if  any,  effort  to  rcal\w  in  its  contemporary  legislation  the 
ideal  of  educational  independence  which  had  been  characteristic 
of  earlier  school  legislation  (notably  Chapter  386  of  the  Laws  of 
1851),  and  such  measure  of  independence  as  was  contemplated  in 
the  charter  of  1901  was,  as  indicated  above,  greatly  reduced  by 
subsequent  legislation  or  by  acquiescence. 

By  1917,  the  Department  of  Education  was  functioning  very 
much  as  a  regular  city  department.  The  3-mill  allowance  was  so 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  49 

inadequate  that  the  Board  of  Education  would  have  been  help- 
less had  the  City  not  granted  additional  funds  to  run  the  schools^ 
The  budget  for  1917,  for  example,  appropriated  $41,430,447.49 
for  the  general  and  special  school  funds,  while  the  amount 
yielded  by  the  3-mill  tax  and  included  in  the  budget  for  that  year, 
was  only  $25,753,057.53.  The  Department  of  Education  acted 
with  and  depended  upon  other  city  authorities,  such  as  the  Cor- 
poration  Counsel,  the  Department  of  Finance,  Board  of  Estimate 
and  Apportionment  and  the  Sinking  Fund  Commission,  in  connec- 
tion with  its  contracts,  leases,  real  estate  transactions  and  pro- 
posals for  the  construction  of  new  schools.  It  is  probably  safe  to 
say  that  what  independence  the  Board  of  Education  may  have 
had  under  a  strict  interpretation  of  the  law  was  not  exercised. 

The  situation  was  radically  changed  by  the  enactment  of  Chap- 
ter 786  of  the  Laws  of  1917,  which  amended  the  State  Education 
Law,  by  providing  for  Boards  of  Education  in  the  several  cities 
of  the  State  and  which  repealed  nearly  all  the  sections  of  the  New 
York  City  Charter  with  respect  to  the  public  school  system.  The 
advocates  of  this  legislation  contended  that  public  education  in 
cities  was  as  much  a  matter  of  State  concern  as  in  villages  and 
towns,  and  that  the  many  varying  laws  controlling  school  systems 
should  be  brought  together  and  made  an  integral  part  of  the  State 
Education  Law. 

The  consolidation  and  unification  which  was  effected,  however, 
is  strikingly  similar  to  the  kind  of  consolidation  effected  by  the 
first  charter  of  the  Greater  City,  where  the  customs  and  machin- 
ery of  the  two  cities  of  New  York  and  Brooklyn  were,  to  a  con- 
siderable extent,  perpetuated  in  the  new  instrument.  The  State 
Law  of  1917  provides  for  about  as  many  different  kinds  of  Board? 
of  Education  as  there  were  before,  and  it  preserves  the  right? 
enjoyed  by  certain  communities  and  jealously  defended  by  them 
It  has  the  virtue  of  including,  in  one  article,  most  of  the  provisions 
of  law  relative  to  city  schools,  but  it  does  not  provide  a  consistent; 
or  a  uniform  system  of  control. 


50 


INVESTIGATION  OF  AFFAIRS  OF  £[EW  YORK  CITY 


EDUCATION  UNDER  THE  PROVISIONS  OF  CHAPTER  786,  LAWS  OF 
1917,  AS  AMENDED  THROUGH  1921. 

It  is  not  necessary  in  the  present  connection  to  comment  on 
the  patchwork  character  of  this  law.  The  powers,  duties  and 
composition  of  boards  of  education  in  the  larger  cities  of  the 
State  differ  amazingly,  and  the  organization  of  the  school  sys- 
tems left  in  some  cities  to  local  control  is  in  New  York  pre- 
scribed with  regard  to  certain  phases  such  as  the  Board  of 
Superintendents  and  the  Bureau  of  Compulsory  Education.  It 
is  enough  to  compare  the  conditions  under  the  charter  of  1901 
as  it  stood  in  1917,  with  the  present  legislative  provisions. 

The  following  analysis  of  the  more  important  provisions  of 
both  statutes  is  submitted  in  parallel  columns  to  facilitate 
comparison : 


Section     Charter  Provisions 

1055  School   property  vested   in   city 

under    control    of    Board    of 

Education. 


1059  Board   of   Estimate    and   Board 

of  Aldermen  given  power  to 
raise  by  tax  amounts  re- 
quired for  school  purposes,  as 
called  for  by  annual  city 
budget. 

1060  General      and      special      school 

funds  established  and  Board 
of  Education  given  power  to 
administer  "  all  moneys  .  .  . 
available  for  educational  pur- 
poses in  the  city  of  New 
York." 


1061  Board   of  Education  created  to 

consist  of  46  unpaid  mem- 
bers appointed  by  the  mayor 
for  5-year  terms:  22  from 
Manhattan,  4  from  the 
Bronx,  14  from  Brooklyn,  4 
from  Queens,  2  from  Rich- 
mond. 

1062  Board   of   Education   given  cor- 

porate powers. 

1064  Board  of  Education  to  be  rep- 
resentative of  entire  school 
system.  By  Sept.  15th  to 
submit  annually  to  Board  of 
Estimate  a  detailed  estimate 


Section     State   Law  Provisions 
868-3  Charter     sec.      1055     not     re- 
pealed.     Board    of    Education 
given    care,    custody    and    con- 
trol of  all  city  school  property. 

Charter  sec.  1059  repealed. 


877-7  Charter  sec.  1060  repealed. 
General  and  special  school 
funds  defined  and  established, 
and  Board  of  Education  given 
power  to  administer  "  all 
moneys  .  .  .  available  for  edu- 
cational purposes  in  the  city," 
subject  to  audit  by  the  Depart- 
ment of  Finance. 

865-866  Charter  sec.  1061  repealed. 
Board  of  Education  created  to 
consist  of  seven  members:  two 
from  each  of  the  two  boroughs 
with  the  largest  population, 
and  one  from  each  of  the  other 
three  appointed  by  the  mayor 
for  seven-year  terms. 

300  Boards  of  education  in  cities 
made  corporations. 

877-1  Charter  sec.  1064  repealed. 
Board  of  Education  by  Septem- 
ber 1st  to  submit  annual  esti- 
mate for  ensuing  fiscal  year  to 
Board  of  Estimate  and  Appor- 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE 


51 


Section     Charter  Provisions 

of  moneys  required  for  next 
calendar  year.  Board  of  Esti- 
mate required  to  appropriate 
for  general  school  fund  not 
less  than  the  yield  of  3  mills. 
Board  of  Education  to  ad- 
minister all  mone/s  subject 
to  audit  by  Department  of 
Finance. 


1066  Board  of  Education  empowered 

to  dispose  of  personal  prop- 
erty. 

1067  Board  of  Education  empowered 

to  appoint  secretary,  super- 
intendent of  school  buildings, 
superintendent  of  school  sup- 
plies, city  superintendent  of 
schools,  supervisor  of  lec- 
tures, director  and  assist- 
ant director  of  reference 
and  research,  and  one  or 
more  auditors;  also  a  chief 
clerk  and  "  such  other  offi- 
cers, clerks  or  subordinates 
as  it  may  deem  necessary  .  .  . 
and  as  are  provided  for  by 
the  proper  appropriations." 
These  appointees  removable 
for  cause  by  three-fourths 
vote. 


1068  Board  of  Education  empowered 
to  enact  by-laws,  rules  and 
regulations  for  the  transac- 
tion of  its  business  and  "  de- 
fining the  duties  of  the  city 
superintendent  of  schools,  the 
director  and  assistant  director 
of  the  Division  of  Reference 
and  Research,  the  superin- 
tendent of  school  buildings. 


Section     State   Law  Provisions 
877-7  tionment,  which  is  required  to 
appropriate  the  amount  of  such 
estimate  up  to  the  yield  of  4.9 
mills.     Board  of  Estimate  au- 
thorized to  make  additional  ap- 
propriations.     Board    of    Edu- 
cation empowered  to  adminis- 
ter   all    moneys    available    for 
educational     purposes     subject 
to    audit    by    Department    of 
877-8  Finance.     Board  of  Education 
may    submit   special   estimates 
to   meet   emergencies. 
Charter  sec.  1066  not  repealed. 


868  Charter  sec.  1067  repealed.  Pow- 
ers and  duties  of  Board  of 
Education  as  follows:  To  per- 
form any  duty  imposed  by 
State  law  or  regulation  of  the 
University  of  the  State  of  New 
York  or  Commissioner  of  Edu- 
cation; to  create,  abolish, 
maintain  and  consolidate  such 
positions,  divisions,  boards,  or 
bureaus  as  it  deems  necessary; 
to  appoint  a  superintendent  of 
schools,  such  associate  district 
or  other  superintendents,  etc., 
as  it  deems  necessary,  and  to 
determine  their  duties,  except 
as  otherwise  prescribed  by  the 
Education  Law;  to  appoint 

872  district  superintendents,  di- 
rectors, supervisors,  principals, 
teachers  and  all  other  members 
of  the  teaching  and  supervis- 
ing staff  upon  recommen- 
dation of  the  Board  of  Super- 
intendents ( except  associate 
superintendents  and  exam- 
iners) and  to  appoint  asso- 
ciate superintendents  and  ex- 
aminers and  all  other  em- 
ployees (except  members  of  the 
teaching  and  supervising  staff, 
the  appointment  of  whom,  must 
be  on  recommendation  of 
Board  of  Superintendents). 

868-9  Charter  see.  1068  repealed. 
Board  of  Education  empowered 
to  prescribe  such  regulations 
and  by-laws  as  may  be  neces- 
sary to  make  effectual  the  pro- 
visions of  this  chapter,  etc. 


INVESTIGATION  OF  AFFAIRS  OF  HEW  YORK  CITY 


Section     Charter  Provisions 

the  superintendent  of  school 
supplies,  of  its  auditor  or  au- 
ditors, its  clerks  and  subordi- 
nates," etc. 

1069  Additional  powers  of   Board   of 

Education : 

1.  To    establish    and    conduct 

elementary  schools,  kinder- 
gartens, manual  training 
schools,  trade  schools, 
truant  schools,  evening 
schools  and  vacation 
schools. 

2.  To  maintain   free   lectures 

and  courses  of  instruction 
for  the  people  of  the  city 
of  New  York. 

3.  To  provide   special   classes 

for  instruction  in  English 
to  foreigners. 

4.  To  provide   "  one   or   more 
high  schools  and  training 
schools." 

5.  To    establish    and    conduct 

playgrounds  in  connection 
with  the  public  schools. 

6.  To    establish    new    schools 

and  discontinue  or  consoli- 
date any  schools. 

7.  To  make  contracts  with  ap- 

proval of  board  of  esti- 
mate for  transportation  of 
pupils. 

8.  To     establish      a     bureau 
of    compulsory    education, 
school    census    and    child 
welfare.    "  On  the  nomina- 
tion of  the  board  of  super- 
intendents   the    board    of 
education  shall  have  power 
to  appoint  a  director  and 
an  assistant  director  "  and 
other    employees,    and    fix 
their    salaries    within    the 
proper   appropriation. 

1070  Secretary    to    have    charge     of 

rooms,  books,  papers,  etc.,  of 
the  board  and  to  perform 
"  such  other  duties  as  may 
be  required  by  its  members 
or  committees." 

1071  Board  of  Education  empowered 

to  establish  branch  offices  of 
the  bureaus  of  school  build- 
ings and  school  supplies  in 
the  several  boroughs,  super- 
intendent of  school  buildings 
to  be  executive  officer  of  the 
board  "  in  respect  to  all  mat- 
ters relating  to  the  bureau  of 
buildings." 


Section     State   Law  Provisions 


868-5  Charter  sec.  1069  repealed  ex- 
cept subdivision  8.  Board  of 
Education  has  power  to  estab- 
lish and  maintain  such  free  ele- 
mentary schools,  high  schools, 
training  schools,  vocational 
and  industrial  schools,  kinder- 
gartens, technical  schools,  night 
schools,  part-time  or  continua- 
tion schools,  vacation  schools, 
schools  for  adults,  open  air 
schools,  schools  for  the  men- 
tally and  physically  defective 
children,  or  such  other  schools 
or  classes  as  it  may  deem 

868-6  necessary,  and  to  establish  and 
maintain  libraries,  public  lec- 
ture courses,  playgrounds,  rec- 
reation centers,  social  centers 
and  reading  rooms. 


871 -a  Bureau  of  compulsory  educa- 
tion, school  census  and  child, 
welfare  made  mandatory,  em- 
ployees continued  in  office  dur- 
ing good  behavior  and  remov- 
able only  for  cause. 


Charter  sec.  1070  repealed. 


Charter  sec.  1071  repealed. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE 


53 


Section     Charter  Provisions 

1073  All  plans  for  new  school  build- 

ings, additions  and  structural 
alterations  must  be  approved 
by  superintendent  of  school 
buildings,  who  shall  submit 
such  plans  to  Board  of  Edu- 
cation, whose  action  shall  be 
final. 

1074  Janitors  shall  be  appointed  by 

the  Board  of  Education. 
107o  Board  of  Education  shall  pro- 
vide for  purchase  of  all  books, 
supplies,  etc.,  and  shall  have 
power  to  enact  by-laws  and 
resolutions  for  government  of 
superintendent  of  supplies, 
winch  by-laws,  etc.,  shall  pro- 
vide that  all  supplies  as  far 
as  possible  shall  be  obtained 
by  contract  after  public  let- 
ting in  accordance  with  sec- 
tion 419. 

1076  Bureau  under  superintendent  of 

supplies  to  be  subject  to  rules 
and  regulations  of  Board  of 
Education.  Superintendent  of 
supplies  may  appoint  such 
deputies  and  other  subordi- 
nates as  the  by-laws  of  the 
Board  of  Education  may  au- 
thorize. He  shall  be  the  ex- 
ecutive officer  of  the  board  in 
respect  of  supplies,  printing, 
transportation  of  pupils  and 
such  other  matters  as  may  be 
assigned  him  by  the  board. 

1077  City   superintendent   shall  have 

right  of  visitation  and  in- 
quiry in  all  schools  of  the  city 
and  shall  report  to  the  board 
thereon.  He  shall  have  a  seat 
and  a  right  to  speak  in  the 
board  meetings,  but  no  vote. 


1078  City  superintendent  shall  visit 
schools  and,  subject  to  by- 
laws, prescribe  forms  and 
regulations  for  conducting 
school  business.  Under  direc- 
tion of  Board  of  Education 
he  shall  enforce  Compulsory 
Education  Law.  He  may  ap- 
point clerks  as  authorized  by 
the  Board  of  Education,  and 
assign,  suspend  or  discharge 
them  subject  to  appeal  to  the 
Board  of  Education.  He  shall 


Section     ISlate  Law   Provisions 
Charter  sec.  1073  repealed. 


Charter  sec.  1074  repealed. 

868-4  Charter  sec.  1075  repealed. 
Board  of  Education  to  secure 
necessary  books,  supplies,  etc. 


Charter  sec.  1076  repealed. 


870-1  Charter  sees.  1077  and  1078 
repealed.  Superintendent  of 
schools  shall  have  power,  sub- 
ject to  by-laws,  to  enforce  all 
rules,  etc.,  relating  to  the  man- 
agement of  the  schools,  etc. ;  to 
be  the  chief  executive  officer 
of  the  Board  of  Education  and 
the  educational  system;  to 
have  a  seat  and  voice  but  not 
a  vote  at  board  meetings;  to 

4  have  supervision  and  direction 
of  all  persons  employed  by  the 
Board  of  Education;  to  trans- 
fer   teachers    on    recommenda- 
tion  of   board   of    superintend- 
ents; to  suspend  any  employee 
until    next    meeting   of    Board 

5  of  Education;    to  have    super- 
vision   and   direction   over   the 
enforcement  of  courses  of  study 
and   all  the   other  educational 
activities  under  control  of  the 
Board   of  Education;    to  issue 


54 


INVESTIGATION  OF  AFFAIBS  OF 


YORK  CITY 


Section     Charter  Provisions 

assign  associate  and  district 
superintendents  subject  to  by- 
laws. Twenty-three  district 
superintendents  to  be  as- 
signed, each  one  to  two  local 
school  board  districts. 

1079  Board  of  superintendents  estab- 
lished, consisting  of  city  su- 
perintendent and  eight  asso- 
ciate superintendents  ap- 
pointed by  the  Board  of  Edu- 
cation for  six  years.  Board 
of  Education  empowered  to 
pa&s  by-laws  regulating  du- 
ties of  city  superintendent 
and  board  of  superintendents. 
There  shall  be  twenty-six  dis- 
trict superintendents  to  be 
appointed  by  Board  of  Edu- 
cation for  six  years  on  nomi- 
nation of  board  of  superin- 
tendents. Board  of  Education 
empowered  to  appoint  direct- 
ors of  special  branches  for 
six  years  on  nomination  by 
board  of  superintendents. 

1032  Board  of  superintendents,  sub- 
ject to  approval  of  Board  of 
Education,  shall  establish 
rules  governing  promotion, 
transfer,  etc.,  of  pupils. 

1083  Board  of  Education  shall,  upon 
recommendation  of  board  of 
superintendents,  approve  text 
books,  etc. 


1084  Board  of  Education  shall  have 
power  to  change  grades  and 
adopt  and  modify  courses  of 
study,  but  such  changes  must 
first  be  presented  to  board  of 
superintendents  and,  in  case 
of  adverse  report  by  latter, 
change  shall  not  be  effective 
unless  passed  by  two-thirds 
vote. 

1087  Creation  of  forty-six  local  school 
board  districts  and  local 
school  boards  of  five  persons 
appointed  by  borough  presi- 
dent, district  superintendent 
and  Board  of  Education  mem- 
ber. 


Section     State  Law  Provisions 

licenses  to  teachers  on  recom- 
mendation  of   board   of  exam- 

870-6  iners;    to  have  general   super- 

871  vision  of  bureau  of  compulsory 
education,  school  census  and 
child  welfare. 

869  Charter  sec.  1079  repealed.  Board 
of  superintendents  continued, 
consisting  of  superintendent  of 
schools  and  eight  associate  su- 
perintendents, superintendent 
to  be  chairman.  It  has  power 

870-2  to  prepare  the  content  of  each 
course  of  study  authorized  by 
Board  of  Education,  subject  to 
approval  by  Board  of  Educa- 

870-4  tion;  to  recommend  text  books; 
to  recommend  to  superintend- 
ent the  transfer  of  teachers. 


870-5  Charter  sec.  1082  repealed. 
Board  of  superintendents  to 
have  power  to  make  rules  and 
regulations  for  promotion  and 
graduation  of  pupils. 

868-8  Charter  sec.  1083  repealed. 
Board  of  Education  has  power 
to  authorize  and  determine 
text  books  from  lists  recom- 
mended by  board  of  superin- 
tendents. 

868-7  Charter  sec.  1084  repealed. 
Board  of  Education  has  power 
to  authorize  the  general 
courses  of  study  and  to  ap- 
prove the  content  of  such 
courses  before  they  become 
operative. 


873  Charter  sec.  1087  repealed.  Local 
school  board  districts  contin- 
ued, but  Board  of  Education 
given  power  to  modify  bound- 
aries, consolidate  two  or  more 
and  establish  new  ones.  Local 
school  boards  to  consist  of  five 
persons  appointed  by  the  bor- 
ough president,  a  member  of 
the  Board  of  Education  desig- 
nated by  the  board,  and  a  dis- 
trict superintendent  assigned 
by  the  city  superintendent. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE 


55 


Section     Charter  Provisions 

1088  Duties  of  local  school  boards: 

1.  To  visit  and  inspect  schools 

at  least  once  each  quarter. 

2.  To  report  on  needs  for  new 

accommodations,  recom- 
mend sites,  repairs,  etc. 

3.  To    report     dereliction     of 

duty. 

4.  To     excuse     teachers'     ab- 

sences, subject  to  approval 
of  board  of  superintend- 
ents, for  absence  with  pay, 
and  in  accordance  with  by- 
laws. 

5.  To  try   and    determine   all 

matters  regarding  discip- 
line and  corporal  punish- 
ment. 

6.  To   try   charges   against   a 

teacher. 

7.  To  transfer  teachers  within 

district,  after  hearing  and 
subject  to  approval  of 
board  of  superintendents. 

1089  Board  of   examiners   created  to 

license  teachers,  consisting 
of  city  superintendent  and 
four  persons  appointed  by 
Board  of  Education  upon 
nomination  by  city  super- 
intendent. 

1090  Principals,     branch     principals, 

heads  of  departments,  teach- 
ers, assistants  and  all  mem- 
bers of  teaching  staff  shall  be 
appointed  by  Board  of  Edu- 
cation on  nomination  of  board 
of  superintendents,  from  es- 
tablished eligible  lists. 

1091  Board  of  Education   shall  have 

power  to  fix  salaries  of  mem- 
bers of  supervising  and  teach- 
ing staff  subject  to  certain 
minimums  prescribed  by  the 
statute. 


1093  Board  of  Education  empowered 
to  suspend  principals,  teach- 
ers, etc.,  with  or  without  pay, 
pending  trial  of  charges  pre- 
ferred against  them. 

1096  Mayor  can  remove  any  member 
of  Board  of  Education  or 
local  school  board  for  causes 
specified. 

1098  Board  of  Education  may  remove 
any  school  officer  interested 
in  furnishing  supplies,  etc. 


Section     State  JLaw  Provisions 
873-4  Charter     sec.     1088     repealed. 

Powers  and  duties  of  local 

school  boards : 

1.  To  visit   schools  at   least 
once  in  each  quarter. 

2.  To  make  recommendations 
to  Board  of  Education. 

3.  Subject     to     by-laws     of 
Board    of    Education,    to 
transfer    teachers,    excuse 
absences   of  teachers,   and 
hear  charges  against  prin- 
cipals or  teachers. 


871  Charter  sec.  1089  repealed.  Board 
of  examiners  to  consist  of 
seven  members  to  hold  exami- 
nations and  promulgate  eli- 
gible lists,  and  perform  the  du- 
ties required  by  Board  of  Edu- 
cation. 

Charter  sec.  1090  repealed. 


See  sec.  872  summarized  above. 


882  Board  of  Education  shall  adopt 
by-laws  fixing  salaries  of  mem- 
bers of  teaching  and  supervis- 
ing staff,  but  they  shall  not  be 
less  than  the  rates  prescribed 
by  the  State. 

Charter  sec.  1093  repealed. 


Charter  sec.  1096  not  repealed. 


Charter  sec.  1098  not-  repealed. 


INVESTIGATION  OF  AFFAIRS  OF  JSTsw  YORK  CITY 


Section     Charter   Provisions 

1099  Contributions    by    members     of 

teaching  or  supervising  force 
to  funds  to  affect  legislation 
increasing  their  emoluments, 
prohibited. 

1100  Board  of  Education  may  inves- 

tigate any  subject  over  which 
it  has  legal  control  or  of 
which  it  has  cognizance,  in- 
cluding conduct  of  employees. 

1101  Continuance  in  office  of  all  em 

ployees  under  public  school 
system. 

1102  State  school  moneys  payable  to 

city  and  credited  to  general 
fund  for  reduction  of  taxa- 
tion. 


Section     State   Law   Provisions 

Charter  sec.  1099  not  repealed. 


Charter  sec.  1100  not  repealed. 


Charter  sec.  1101  not  repealed. 


Charter  sec.  1102  not  specifically 

repealed. 

880  State  school  moneys  to  be  cred- 
ited to  the  Board  of  Education 
as  well  as  all  funds  raised  by 
the  city  for  any  purpose  au- 
thorized by  the  educational 
chapter. 

877-10  Board  of  Education  shall  not 
incur  a  liability  chargeable 
against  its  funds  or  the  city 
in  excess  of  the  amount  avail- 
able therefor,  or  otherwise  au- 
thorized by  law. 

879-4  Board  of  Estimate  authorized 
to  raise  in  its  discretion  money 
for  new  schools,  sites,  etc. 

880-3  Board  of  Education  to  make 
such  classification  of  accounts 
as  the  comptroller  of  the  city 
shall  require. 


From  the  above  comparative  summary  the  following  outstanding 
features  of  the  new  law  are  apparent,  viz. : 

1.  Reduction  in  size  in  Board  of  Education  from  forty-six  to 

seven  members. 

2.  Possibility  of  conflict  between  the  Board  of  Education  and 

the  Superintendent  of  Schools  relative  to  their  respec- 
tive powers. 

3.  Possibility  of  conflict  between  the  Board  of  Education  and 

the  municipal  authorities  relative  to  their  respective 
powers. 

4.  Failure  to  concentrate  in  clear  and  unmistakable  language 

full  responsibility  for  the  proper  administration  of  the 
public  school  system  either  on  the  municipal  authorities, 
the  Board  of  Education  or  the  State  cf  New  York. 


BEPOET  OF  JOINT  LEGISLATIVE  COMMITTEE  57 

5.  Limitation  of  the  powers  of  the  Board  of  Education. 

6.  Great    increase    in   the   powers    of   the   Superintendent    of 

Schools. 

7.  Perpetuation  of  the  Board  of  Superintendents. 

8.  Perpetuation    of    the    Bureau    of    Compulsory    Education, 

School  Census  and  Child  Welfare. 

9.  Conflict  between  section  1102  of  the  charter,  which  was  not 

specifically  repealed,  and  the  State  Education  Law  rela- 
tive to  the  disposition  to  be  made  of  the  city's  share  of 
the  State  school  moneys ;  the  former  providing  that  such 
money  be  credited  to  the  city's  general  fund  for  the 
reduction  of  taxation,  and  the  latter  that  It  be  credited 
to  the  Board  cf  Education. 

10.  Increase  from  three  mills  to  four  and  nine-tenths  mills  in 

the  amount  which  the  City  is  required  annually  to 
appropriate  for  the  use  of  the  Board  of  Education. 

11.  The  inclusion  within  the  State's  educational  system  of  city 

beards  of  education,  including  the  Board  of  Education 
of  the  City  of  Xew  York  and  the  subordination  of  the 
municipal  authorities  to  the  State  in  matters  of  school 
administration. 

The  new  law  effecting  these  changes  in  the  status  of  the  local 
educational  system  has  been  in  force  for  almost  four  years  and 
its  adequacy  and  effectiveness  should  be  easily  determinable  from 
the  history  of  the  public  schools  during  that  period.  A  consider- 
able amount  of  data  bearing  on  this  subject  has  been  collected  and 
the  President  of  the  Board  of  Education,  the  Superintendent  of 
Schools  and  the  Superintendent  of  School  Buildings  have  been 
examined  at  public  hearings.  The  following  discussion  of  the 
degree  of  success  with  which  the  State  Education  Law  has  been 
administered  is  based  upon  a  combination  of  sworn  testimony  and 
independent  examination  of  the  school  records. 

1.     Reduction  in  size  of  the  Board  of  Education  from  46  to  7 

members. 

One  of  the  most  popular  features  of  the  new  law  at  the  time 
it  was  before  the  Legislature  for  enactment  was  that  it  reduced 
the  size  of  the  Board  of  Education  in  'New  York  City  from  the 
unwieldy  number  of  46  to  the  small  compact  number  of  7.  But 
the  experiences  of  the  past  four  years  have  shown  that  good  school 


58         INVESTIGATION  OF  AFFAIRS  OF  NEW  YOEK  CITY 

management  depends  on  more  than  the  size  of  the  board.  A 
board  of  7  must  be  composed  of  exceptionally  conscientious  and 
capable  persons  if  it  is  to  discharge  satisfactorily  its  many 
responsibilities,  and  it  must  be  composed  of  recognized  authori- 
ties in  the  field  of  education  and  business  if  it  is  to  command 
public  respect.  The  appointments  made  to  the  new  beard  of  7 
do  not  seem  to  have  been  made  with  due  regard  to  these  considera- 
tions. It  is  doubtful  if  the  names  of  the  present  members  are 
known  to  more  than  a  small  proportion  of  the  city's  population, 
and  if  the  names  are  known,  it  is  exceedingly  doubtful  if  the 
qualifications  of  these  members  are  known.  The  President  of 
the  Board  of  Education  admitted  on  the  witness  stand  that  prior 
to  his  appointment  to  the  Board  he  had  not  been  specially  inter- 
ested in  educational  matters  or  administration  (Vol.  Ill,  p.  1205). 
In  response  to  further  inquiries  he  stated  that  he  was  in  the  real 
estate  business,  although  at  the  present  time  he  was  not  actually 
engaged  in  any  business.  As  to  his  personal  educational  qualifica- 
tions, he  stated  (Vol.  Ill,  p.  1205)  that  he  was  a  common  school 
and  high  school  graduate,  but  had  not  attended  college. 

In  January,  1922,  the  President  of  the  Board  of  Education 
resigned  his  office  and  accepted  a  political  appointment  to  a 
$7,000  job  as  Commissioner  of  Taxes  and  Assessments.  The 
person  appointed  by  the  Mayor  to  fill  the  vacancy  occasioned  by 
the  President's  resignation  has,  according  to  the  City's  civil  list, 
been  a  paid  employee  of  the  City  of  New  York,  from  1914  to 
the  end  of  1921,  his  last  position  being  that  of  Commissioner 
of  Public  Works,  at  a  salary  of  $5,500,  under  a  Borough  President 
whose  term  of  office  expired  December  31,  1921. 

One  of  the  most  important  committees  of  the  Board  of  Educa- 
tion is  the  committee  on  buildings  and  sites.  The  chairman  of 
that  committee  is  the  personal  physician  of  the  Mayor's  family. 
Without  wishing  to  reflect  in  any  way  upon  the  probity  of  the 
individuals  in  question,  or  upon  other  members  of  the  present 
Board  of  Education,  the  committee  believes  that  the  persons 
appointed  during  the  last  four  years  do  not  all  possess  the  highest 
qualifications  for  membership  on  this  important  body. 

The  newest  appointee  is  almost  totally  unknown  outside  of 
Ms  own  borough.  Even  in  his  own  borough  he  is  not  conspicuous 
for  his  knowledge  of  and  interest  in  educational  problems. 

The  law  establishes  qualifications  for  the  office  of  Superin- 
tendent of  Schools  and  other  members  of  &e  professional  staff, 


EEPOET  OF  JOINT  LEGISLATIVE  COMMITTEE  59 

but  members  of  the  Board  of  Education  who  are  to  determine  the 
educational  policies  to  be  carried  out  by  these  professional  school- 
men may  be  selected  with  regard  only  to  the  borough  of  their 
residence.  With  no  other  check  upon  the  appointing  power,  it 
is  not  surprising  that  political  considerations  should  carry  great 
weight.  Politics  should  be  kept  out  of  the  public  schools  and 
some  statutory  safeguard  should  be  erected  to  insure  the  selec- 
tion of  persons  qualified  for  other  than  political  reasons  for 
membership  in  the  Board  of  Education.  This  can  be  done  by 
requiring  appointments  to  the  Board  of  Education  to  be  made 
by  some  non-political  agency;  that  the  desirability  for  some  such 
provision  is  more  than  theoretical  is  adequately  established  by  the 
evidence  below. 

The  best  test  of  the  qualifications  and  competency  of  the  present 
Board  of  Education  is  afforded  by  its  record  of  the  past  four  years, 
a  brief  account  of  which  will  now  be  submitted. 

a.     Inadequate  School  Accommodations. 

In  December,  1917,  the  month  before  the  present  Board  of 
Education  took  office,  there  were  746,114  children  registered  in 
the  day  elementary  schools,  of  whom  34,153  were  on  part  time  and 
76,214  on  the  so-called  duplicate  form  of  organization.  In 
October,  1921,  the  last  month  for  which  figures  are  now  available 
(December,  1921)  there  were  817,210  children  on  register  in  the 
day  elementary  schools,  of  whom  81,242  were  on  part  time  and 
194,234  on  double  session. 

In  the  day  high  schools  there  were  58,063  registered  in  Decem- 
ber, 1917,  none  of  whom  were  on  double  session  and  only  1.796 
were  on  part  time  In  October,  1921,  the  register  had  increased  to 
82,265  and  there  were  1,516  children  on  double  session  and 
33,892  on  part  time. 

These  figures  demonstrate  conclusively  that  the  Board  of  Edu- 
cation has  not  provided  sufficient  additional  school  accommoda- 
tions to  care  for  the  growth  of  school  population.  It  is  a  serious 
reflection  upon  New  York  City  that  115,134  children  should  be 
deprived  of  a  full  day's  schooling  and  that  195,750  children 
should  be  subjected  to  the  disadvantage  of  the  double  session 
expedient  to  which  the  city  has  resorted.  Such  a  condition  is 
intolerable  and  the  fault  lies  with  the  Board  of  Education,  the 
city  authorities,  or  the  provisions  of  law  under  which  they  operate. 
If  the  trouble  is  with  the  law,  it  is  the  duty  of  the  Board  of  Edu- 


60         INVESTIGATION  OF  AFFAIKS  OF  NEW  YORK  CITY 


cation  to  seek  such  amendments  as  will  obviate  the  difficulty. 
Unless  the  Board  has  actively  concerned  itself  with  desirable 
modifications  of  the  statute,  however,  it  cannot  be  free  from 
blame  for  the  failure  to  provide  the  necessary  accommodations. 

The  conspicuous  failure  to  provide  sufficient  accommodations  for 
elementary  school  pupils  is  demonstrated  by  the  foregoing  figures. 
Confirmation  is  afforded  by  the  compilation  of  statistics  showing 
the  capacity  of  new  elementary  school  buildings  and  additions 
opened  during  the  past  four  years.  The  records  show  the  follow- 
ing: 

No.  of  New  Buildings  or  No.  of  Sittings 
Year                 Additions  Opened  Therein 

1918..  .......  2  1,294 

1919  .........  4  1,380 

1920  .........  None  None 

1921  to  Dec.  6.  16*  19,203 

Total..  22  21,877 


During  the  preceding  four  years,  44  new  elementary  buildings 
or  additions  were  opened,  with  52,847  sittings,  so  that  the  record 
of  the  present  Board  of  Education  is  unsatisfactory,  both  as  com- 
pared with  requirements  and  as  compared  with  the  accomplish- 
ments of  its  predecessor. 

Various  reasons  have  been  given  by  city  and  school  officials  to 
explain  the  delay  in  school  construction,  the  war  being  the  one 
most  frequently  mentioned.  The  record,  however,  does  not  indi- 
cate that  the  war  played  more  than  an  incidental  part  in  this 
matter.  At  the  time  the  small  Board  of  Education  took  office,  it 
found  a  building  program  prepared  by  its  predecessor,  calling 
for  the  erection  of  certain  specified  buildings,  and  plans  were 
practically  completed  for  several  typical  schools.  In  addition 
there  were  authorizations  aggregating  about  $10,000,000  from 
which  the  cost  of  construction  could  be  defrayed.  The  new 
Board,  however,  did  not  make  use  of  thk  program  or  of  the 
funds.  On  May  10,  1918,  the  President  of  the  Board  reported  that 
"  this  Board  undertook  to  set  aside  all  previous  plans  and  begin 
de  novo,"  and  on  December  30,  1918,  the  Board  of  Estimate 
rescinded  the  authorizations  made  by  the  previous  administration 
for  new  school  construction.  The  first  bids  called  for  by  the  new 
Board  were  for  P.  S.  !STo.  29,  Brooklyn.  The^  were  opened  July 
10,  1918.  The  contract  was  let  but  was  latv^1  rescinded  at  the 


*  Of  the  16  opened  in  1921,  all  but  two  were  opened  after  September  1st. 


BEPOET  OF  JOIXT  LEGISLATIVE  COMMITTEE  61 

request  of  the  War  Industries  Board.  It  would  appear,  there- 
fore, that  the  only  delay  in  school  construction  actually  attribut- 
able to  the  war  and  the  rules  of  the  War  Industries  Board  was  the 
four  month  period  from  July  when  the  first  contract  was  awarded, 
and  November,  when  the  armistice  was  signed.  On  November 
13,  1918,  the  Superintendent  of  School  Buildings  reported  that 
plans  and  specifications  for  fourteen  new  buildings  and  additions 
were  ready  for  the  estimating  table,  but  the  first  construction 
contract  was  not  let  until  March  24,  1919.  During  1919  fourteen 
construction  contracts  were  let  and  all  fourteen  covered  buildings 
on  the  program  of  the  previous  administration  for  which  the 
funds  had  been  authorized  by  the  previous  administration.  It 
took  the  new  Board  of  Education  more  than  fourteen  months  to  gu 
ahead  with  the  identical  schools  selected  by  its  predecessor. 

It  is  difficult  to  find  a  satisfactory  explanation  of  the  delays  in 
school  construction.  The  passive  role  played  by  the  Board  of 
Education  was  one  factor.  It  received  pressure  and  criticism 
from  the  Mayor  and  from  the  city  authorities  and  it  encountered 
obstacles  in  its  own  organization  and  procedure,  but  instead  of 
responding  actively  to  the  pressure  or  striving  vigorously  to  over- 
come the  obstacles  it  apparently  more  or  less  acquiesced  in  condi- 
tions as  it  found  them.  The  following  quotations  from  letters  of 
the  Mayor  and  from  the  testimony  of  the  President  of  the  Board 
of  Education  are  illustrative  of  this  point. 

On  August  8,  1918,  the  Mayor  wrote  to  a  member  of  the  Board 
of  Education  in  part  as  follows: 

"  Six  months  of  our  administration  have  passed  by  and 
very  little  has  been  done  toward  the  construction  of  schools. 
If  Mr.  Snyder  cannot  build  more  than  one  or  two  schools  at 
a  time,  would  it  not  be  a  good  idea  to  replace  him  with  a  man 
who  could  have  five  or  six  schools  in  the  course  of  construc- 
tion at  the  same  time  ? 

"  If  the  Board  of  Education  will  first  figure  out  ho^\ 
many  schools  can  be  constructed  with  the  money  now  avail- 
able and  after  conferring  with  the  Presidents  of  the  various 
boroughs  will  then  recommend  where  the  schools  are  imme- 
diately required,  I  will  then  submit  your  plan  to  the  mem- 
bers of  the  committee  on  finance  and  budget,  so  that  action 
I  can  be  at  once  taken  and  at  least  seven  or  eight  new  schools 
be  started  without  any  further  delay.  .  .  .  You  have  a 
standard  type  of  school.  You  have  some  school  sites  where 


62         INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

schools  are  necessary.  If  YOU  have  not  enough,  let  us  pro- 
ceed to  secure  a  sufficient  number  of  sites  in  accordance  with 
the  money  we  have  on  hand  and  start  the  schools  at  once/7 

This  letter  was  read  into  the  testimony  and  the  President  of 
the  Board  was  then  questioned  as  follows  (Vol.  Ill,  p.  1264)  : 

"  Q.  N"ow,  at  the  time  you  received  that  letter,  the 
$10,000,000  authorization  was  in  force?  A.  Yes,  sir. 

"  Q.  Remained  in  force  until  the  30th  of  the  following 
December  ?  A.  Yes,  sir. 

11  Q.  But  that  letter  did  not  result  in  any  action  along  the 
line  of  new  school  buildings  under  that  authorization?  A. 
Well,  no ;  not  under  that  particular  authorization,  no. 

"  Q.  Well,  or  any  other  authorization  until  after  Decem- 
ber 30th  ?  A.  I  can't  recall  whether  it  was  prior  to  that  date 
that  the  Board  submitted  its  program  for  27  new  elementary 
schools. 

"  Q.  You  said  in  May  that  you  had  made  a  complete  new 
program  and  wiped  out  the  old  program  ?  A.  Yes.  But  I 
think  perhaps  that  program  had  been  sent  in  —  I  am  not 
certain  —  I  think  it  had  been  sent  in  before  the  receipt  of 
this  letter." 

On  October  17.  1918,  the  Mayor  wrote  again,  in  part,  as  follows 
(Vol.  Ill,  p.  1266): 

"  The  question  of  a  sufficient  number  of  new  school  build- 
ings in  this  city  to  properly  house  the  school  children  is  giv- 
ing me  great  concern.  .  .  .  We  have  some  ten  millions 
of  dollars  available  for  building  schools.  I  would  like  to 
have  that  money  employed  for  that  purpose -and  I  would  like 
to  begin  making  preparations  for  the  construction  of  these 
schools  at  once.  Mr.  Bernard  Baruch,  representing  the  Gov- 
ernment of  the  United  States,  has  declared  that  we  cannot 
at  this  time  have  the  material  necessary  for  the  construction 
of  a  certain  type  of  school  building  .  .  .  .  if  wTe  cannot 
build  one  type  of  school  building  we  can  build  another 
equally  good  type  of  school  building.  If  we  cannot  use  steel 
construction  we  can  use  reinforced  concrete  construction," 

The  examination  of  the  President  of  the  Board  then  proceeded 
•ollowB  (Vcl  in,  p.  1268): 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  63 

"  Q.  Xow,  the  Mayor  wrote  on  October  18th  that  very 
urgent  letter  to  you,  hoping  you  would  use  that  $10,000,000, 
and  I  do  not  understand  how,  in  view  of  a  letter  of  that  kind 
from  the  Mayor,  you  did  not  begin  to  operate  on  the  ten 
million  dollars.  A.  Well,  I  can't  very  well  answer  that, 
Senator,  for  this  reason:  First,  I  was  not  the  President  of 
the  Board  at  that  time  and  I  was  not  on  the  Building  Com- 
mittee at  any  time,  never  on  the  Sites  and  Buildings. 

"  Q.  You  seem  to  be  a  good  man  to  write  letters  to.  A. 
But  we  were  at  that  time  under  that  ban,  and  I  do  not  know 
whether  or  not  at  that  time  the  Board  understood  just  what 
this  ten  million  dollars  meant,  whether  it  was  tied  up  spe- 
cifically on  certain  sites  or  buildings,  I  really  couldn't  say. 
'  *  x  *  ~  #  * 

"  Q.  I  can't  make  out,  in  view  of  this  correspondence,  how 
it  was  that  the  1918  program,  the  1918-1919  program  of  the 
Board  of  Education  was  delayed  the  way  it  was.  I  am 
unable  to  find  out.  A.  Well,  it  made  a  contract,  as  I  under- 
stand in  the  beginning,  we  advertised  for  several  contracts; 
we  made  one  when  the  ban  was  put  on.  That  ban  was  not 
removed  until  Xovember,  until  after  the  Armistice  was 
signed. 

"  Q.  The  llth  of  November?  A.  Until  after  the  Armis- 
tice. Now  this  letter  came  in  October,  and  the  other  letter 
in  July. 

"  Q.  Yes ;  from  August  to  November,  there  was  a  hiatus 
there.  A.  Well,  we  were  helpless  at  that  time. 

"  Q.  What  ?  A.  We  -were  absolutely  helpless,  as  far  as 
making  contracts  was  concerned. 

o 

"  Q.  About  three  months  ?     A.  Oh?  no ;  it  is  more  than 
that,  from  July  until  practically  the  end  of  the  year. 
"  Q.  That  would  be  four  months " 

The  foregoing  quotations  show  the  Mayor's  impatience  at  the 
failure  of  the  Board  of  Education  to  accomplish  more  and  demon- 
strate how  imperfectly  the  President  of  the  Board  of  Education 
could  explain  the  Board's  failure.  Every  member  of  a  small 
board  should  be  familiar  with  such  vital  matters  as  insufficient 
school  accommodations  and  every  member  should  charge  himself 
with  the  duty  of  facilitating  a  building  program  that  is  so  sorely 
needed,  and  with  the  responsibility  of  eliminating  obstacles  to  the 
completion  of  such  programs.  That  there  are  many  obstacles  in 
the  existing  practice  is  shown  below: 


INVESTIGATION  OF  AFFAIKS  OF  J^"EW  YOKK  CITY 


Superintendent  of  Schools 
Associate  Superintendent  Shallow 

Board  of  Superintendents 
Board  of  Education 


J3oard    of    Estimate    and    Apportion- 
ment 


Associate  Superintendent  Shallow 
Board  of  Superintendents 
Board  of  Education 
Superintendent  of  School  Buildings 

Municipal  Art  Commission 
Bureau  of  Buildings 


Department    of    Water    Supply,    Gas 
and  Electricity 


Board  of  Education. 


directs  preparation  of  building  pro- 
gram by 

who  studies  city's  needs,  reports  on 
order  of  urgency  and,  with  assistance 
of  superintendent  of  school  buildings, 
estimates  cost  of  program,  which  he 
recommends  to  the 

which  considers,  and  then  makes  spe- 
cific recommendations  to  the 

which  considers  program  through  its 
committee  of  the  whole  or  committee 
on  buildings  and  sites,  and  then  acts 
on  such  committee's  recommenda- 
tions, sending  its  recommendations  to 
the 


which  has  recommendations  examined 
by  its  committee  on  finance  and 
budget  and  its  engineers  and  acts 
upon  their  report,  then  notifying  the 
Board  of  Education  of  its  action. 

reports  on  layout  of  individual  build- 
ings in  approved  program  to 

which  acts  thereon  and  sends  its  rec- 
ommendations to 

which  considers  and  takes  appro- 
priate action 

as  soon  as  site  is  acquired,  and  sur- 
vey received,  selects  type  best  suited 
to  neighborhood  and  causes  detailed 
plans  to  be  prepared,  submitting  pre- 
liminary and  final  drawings  to 

which  must  approve  design  before 
buildings  can  l)e  erected;  when  this 
approval  is  given  the  general  con- 
struction plans  and  specifications  are 
submitted  by  the  Superintendent  of 
School  Buildings  to 

of  appropriate  borough  for  examina- 
tion and  approval,  while  the  plans 
and  specifications  for  heating  and 
ventilating  (prepared  by  bureau  of 
plant  operation)  and  for  plumbing, 
gasfitting  and  electrical  work  are  sub- 
mitted to  the 

for  examination  and  approval.  These 
plans  and  specifications,  together 
with  those  for  furniture  and  all  other 
equipment,  are  also  transmitted  to 
tlie 

which,  after  approving  them,  for- 
wards them  to  the 


REPOBT  OF  JOINT  LEGISLATIVE  COMMITTEE 


65 


Board    of    Estimate    and    Apportion- 
ment 


Board   of  Education 

Superintendent  of  School  Buildings 
Corporation  Counsel 
Superintendent  of  School  Buildings 

Board  of  Education 


Board   of  Education 
Comptroller 

Board  of  Education 

Comptroller 

Board  of  Education 

Superintendent  of  School  Buildings 
Deputy  Superintendent 
Contractor 

Final  payment  cannot  be  made  to  the 
Commission    issues    a    certificate   that 
approved  plans. 


which,  through  its  committee  on 
finance  and  budget  and  its  engineers, 
examines  the  plans  and  specifications 
for  general  construction,  sanitary 
work,  heating  and  ventilation,  and 
electrical  work,  together  with  those 
for  furniture  and  all  other  equipment, 
acts  thereon  and  notifies  the 

of  its  action,  and  when  this  action  is 
favorable  the  Board  of  Education 
informs  the 

who  then  submits  proposed  advertise- 
ment and  contract  to  the 

for  approval,  and  when  this  approval 
is  obtained  the 

advertises  for  bids  in  the  City  Rec- 
ord for  ten  days,  then  opens  bids  and 
reports  thereon  to 

which  may  award  the  contract,  if  the 
bid  is  within  the  authorized  amount. 
If  not  within  the  estimate,  the  Board 
of  Estimate  and  Apportionment  must 
approve  the  increase  before  the  con- 
tract can  be  awarded.  After  the 
award  the 

notifies  the 

who  examines  and  passes  on  the  sure- 
ties and  returns  bonds  to 

which  then  signs  contract,  has  it  re- 
corded by  its  auditor  and  returns  it 
to  the 

who  gives  final  approval  as  to  finan- 
cial ability  and  then  advises 

which  notifies  the 

who  notifies  appropriate 

who  directs 

to  start  work.     - 

contractors  until  the  Municipal  Art 
the  building  is  in  accordance  with 


An  examination  of  the  periods  of  time  actually  consumed  by 
the  various  agencies  cooperating  in  the  construction  of  schools 
also  disclosed  some  most  significant  facts.  A  brief  life  his- 
tory was  composed  for  each  of  the  schools  on  the  Board 
of  Education's  building  program.  In  two  instances  it  was 
found  that  twenty  years  or  more  had  elapsed  from  the  time  the 
recommendation  for  a  new  building  was  made  by  a  local  school 
board  and  the  time  when  the  building  was  opened  for  use.  P.  S. 


66         INVESTIGATION  OF  AFFAIRS  OF  ^EW  YORK  CITY 

No.  54,  Brooklyn,  for  example,  was  recommended  by  the  school 
board  of  Brooklyn  in  1901 ;  the  contract  date  for  its  completion  is 
September,  1922. 

There  is  also  delay  due  to  the  requirement  that  plans  and 
specifications  be  submitted  to  the  Board  of  Estimate  for  approval. 
The  examination  of  the  record  of  some  twenty  schools  011  the 
current  building  program  shows  that  plans  and  specifications 
were  before  the  Board  of  Estimate  in  one  instance  for  356  days, 
another  for  211  days,  and  in  eight  cases  for  more  than  50  days. 
This  did  not  take  into  account  the  time  between  the  return  by  the 
Board  of  Estimate  and  a  resubmission  by  the  Board  of  Educa- 
tion. In  one  case  the  same  matter  was  four  times  before  the 
Board  of  Estimate.  In  four  other  cases  the  same  matter  was 
before  the  Board  of  Estimate  three  times. 

A  further  index  of  the  actual  accomplishments  of  the  Board  of 
Education  in  providing  additional  school  facilities  is  afforded  by 
the  following  table  of  authorizations  and  expenditures  for  such 
purposes,  annually  from  1910. 

STATEMENT  SHOWING  THE  CORPORATE  STOCK  AUTHORIZATIONS 
AND  CASH  EXPENDITURES  FROM  JANUARY  1,  1910,  to  JUNE 

30,  1921  Cash  Expenditures 

Year                        Authorizations  ( Sites  and  Buildings ) 

1910 $5.270,173  26  $2,632,110  72 

1911 12,138,387  39  4,388.647  65 

1912 360,490  00  4,851,716  26 

1913 6,131,085  00  4,726,394  67 


Total $23,900,135  65  $16,598,869  30 

1914 $798.194  89  $5,386,927  68 

1915 1,505,500  00  4,138,094  66 

1916 6,172,084  68  2,567,537  06 

1917 6,797,571   13  2,177,079  21 


Total 15,273,35070  14,269,63861 

1918 *$678,754  24  $2.233,113  32 

1919 7,000,000  00  2,648,070  46 

1920 8,000.000  00  5,562,616  73 

1921 15,250,000  00  4,780,531   46 


Total 29,571,24576  15,224,33197 


Grand  Total...  .   $68,744,732  11  $46,092,839  88 


It  will  be  noted  that  the  expenditures  of  the  three  and  a  half 
years,  1918  to  July,  1921,  were  but  $15,224,331.97  which,  in  view 
of  the  depreciated  value  of  the  dollar  during  all  this  period  rep- 


.Net  rescindment. 


KEPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  67 

resents  not  more  than  $8,000,000  in  building  value  on  the  basis  of 
1910  to  1917,  or  about  one-half  of  the  previous  four-year  totals. 
The  average  annual  authorization  for  the  eleven  and  a  half 
years  covered  in  the  above  table  was  $5,977,802.79  and  the 
average  annual  expenditure  $4,008,073.03,  or  about  $6,000,000 
and  $4,000,000,  respectively. 

b.     Fire  Hazards  in  the  Schools. 

It  is  the  duty  of  the  Bureau  of  Fire  Prevention  of  the  Fire 
Department  and  the  Bureaus  of  Buildings  in  the  five  boroughs  to 
inspect  school  buildings  to  determine  whether  the  requirements  of 
law  respecting  exits  and  the  elimination  of  fire  hazards  are  being 
complied  with.  In  the  event  that  violations  are  discovered,  it  is 
the  duty  of  these  bureaus  to  serve  notice  thereof  on  the  Board  of 
Education. 

An  examination  was  made  of  the  records  of  the  Board  of 
Education  with  respect  to  such  violations.  It  was  found 
that  at  the  time  of  this  examination,  August,  1921,  there 
were  7,353  violations  of  fire  prevention  rules  recorded  against 
496  of  the  city's  695  school  buildings.  The  Committee's  engineer 
estimated  the  cost  of  removing  these  violations  at  about  $4,500,- 
000.  Some  of  the  violations  are  less  serious  than  others,  but,  on 
the  other  hand,  some  are  of  the  very  greatest  moment,  as,  for 
example,  stairways  that  are  not  enclosed  with  fire  and  smoke 
proof  partitions  and  not  provided  with  self-closing  doors ;  interior 
fire  alarm  systems  that  do  not  work;  wooden  and  not  self-closing 
fireproof  doors  along  the  line  of  exit  stairways;  no  hand  fire 
extinguishers;  and  storage  of  dangerously  inflammable  materials 
in  non-fireproof  rooms  or  compartments. 

The  seriousness  of  this  situation  is  emphasized  by  the  words 
of  the  Superintendent  of  School  Buildings,  quoted  in  the  minutes 
of  the  Board  of  Education  for  March  23,  1921,  as  follows: 

"  This  with  the  continued  growth  of  the  schools  and  conse- 
quent overcrowding  and  congestion,  causes  me  great  un- 
easiness and  distress  of  mind.  If  the  fire  prevention  work 
was  and  is  required  for  schools  under  normal  conditions, 
how  much  more  important  must  it  be  when  a  building  con- 
tains quite  one-half  or  more  in  excess  of  the  normal  .  .  . 
why  paint  and  renovate  the  interior  of  a  building  when 
there  are  essential  items  of  fire  prevention  work  to  be  per- 
formed which  would  actually  operate  to  safeguard  life  and 
lessen  fire  risk." 


68         INVESTIGATION  OF  AFFAIES  OF  .NEW  YORK  CITY 

But  in  spite  of  the  importance  of  this  work  and  of  the  fact  that 
many  of  these  violations  date  back  several  years,  only  $250,000 
was  made  available  for  the  removal  of  fire  violations  during  the 
past  four  years,  and  that  appropriation  was  not  made  until  April, 
1921.  The  following  table  shows  how  the  schools  have  been 
neglected  in  this  respect  as  compared  with  the  years  preceding 
this  administration  and  while  it  should  be  stated  that  the  Board 
of  Education  has  made  repeated  requests  since  1918  for  fire  pre- 
vention funds,  these  requests  have  not  been  effective. 

AUTHORIZATIONS    AND    EXPENDITURES    FOR    FIRE    PREVENTION 
WORK  AS  OF  AUGUST  10,  1921 


Date  of 
Authorization 
Sept      16,  1904 

Amount  of 
Authorization 
$300,000  00 

Expenditures 
$300,000  00 

Balance 

o.")0,000  00 

550,000  00      . 

April      3    1908 

1  000  000  00 

1  000  000  00 

June       3    1910 

450,000  00 

450,000  00      . 

July     17    1911 

450,000  00 

447,666  59 

$2,333  41 

Nov       19    1915 

250,000  00 

250,000  00      . 

July       7    1916 

250  000  00 

250  000  00 

April    20    1917 

250,000  00 

240,660  85 

9,339  15 

April    22    1921 

250  000  00 

250,000  00 

On  September  14th  the  Committee  examined  the  Superintend- 
ent of  School  Buildings  on  this  subject.  Significant  portions  of 
the  testimony  are  given  below  (Vol.  Ill,  p.  1364ff)  : 

"Q.  Well,  this  question  of  doing  away  with  violations  of 
the  fire  prevention  rules  has  been  a  matter  of  a  good  deal  of 
concern  to  you  for  several  years,  hasn't  it  ?    A.  It  has. 
.    "Q.  And  you  have  made  efforts  to  secure  moneys  for  the 
purpose  of  correcting  the  conditions  ?    A.  Yes,  sir. 

"Q.  You  have  reported  it  frequently  to  the  Board  of  Edu- 
cation ?  A.  I  have. 

"Q.  And  seen  that  it  was  presented  to  the  Board  of  Esti- 
mate and  Apportionment?  A.  That  would  not  be  for  me 
to  do. 

"Q.  That  would  not  be  your  function  ?     A.  No,  sir. 

"Q.  I  see  in  your  letter  of  Mar.  18,  1921,  that  you  say: 
'The  condition  in  relation  to  fire  prevention  with  the  con- 
tinued growth  of  schools  and  consequent  overcrowding  and 
congestion,  causes  me  great  uneasiness  and  distress  of  mind.' 
Is  that  true?  A.  It  was. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  69 

"Q.  'If  the  fire  prevention  work  was  and  is  required  for 
schools  under  normal  conditions,  how  much  more  important 
must  it  be  when  buildings  contain  quite  one-half  or  more  in 
excess  of  the  normal  ?'  A.  Yes,  sir. 

"Q.  'I  sincerely  hope  that  a  resumption  of  the  carrying 
out  of  this  most  important  work  may  be  brought  about  with- 
out the  stimulus  represented  perhaps  by  some  awful  acci- 
dent, either  here  or  elsewhere.7  You  said  that,  didn't  you? 
A.  That  is  in  the  letter,  yes. 

"Q.  You  adhere  to  it  ?     A.  I  do. 

"  Q.  And  I  notice  you  say,  i  These  orders  (that  is,  the  fire 
prevention  rules)  have  been  and  are  now  available  at  a  mo- 
ment's notice.  If  there  be  no  intention  of  granting  funds 
for  fire  prevention  work,  then  we  should  know  it  and  make  a 
study  of  the  situation,  looking  to  a  decision  as  to  whether 
or  not  all  moneys  for  certain  repairs  should  be  used  for  this 
work.'  Was  any  such  decision  made  to  divert  moneys  for 
repairs  generally  to  this  work?  A.  What  was  the  date  of 
that  letter,  please  ? 

"Q.  March,  1921?    A.  No. 

"Q.  You  need  the  money  for  other  repairs  that  you  get? 
A.  We  do. 

"Q.  And  you  use  it  for  other  repairs  ?    A.  We  do. 

"Q.  I  notice  you  say,  'Why  paint  and  renovate  the  interior 
of  a  building,  when  there  are  essential  items  of  fire  preven- 
tion work  to  be  performed,  which  would  naturally  operate 
to  safeguard  life  and  lessen  fire  risk.'  A.  That  is  a  question 
of  judgment. 

"Q.  'The  situation  becomes  more  serious  with  each  day's 
delay,'  and  then  comes  an  appeal  to  the  Board  of  Education 
to  apply  to  the  Board  of  Estimate.  I  will  read  it :  'I  would 
earnestly  recommend  that  the  Board  of  Education  adopt 
resolutions  for  transmission  to  the  Board  of  Estimate  and  Ap- 
portionment, stating  the  stern  necessity  of  prompt  action 
upon  the  Board's  request  for  funds  to  enable  the  department 
to  undertake  immediately  fire  prevention  work  that  is  ab- 
solutely necessary  if  we  are  to  safeguard  properly  the  lives 
of  the  children  entrusted  to  our  care.'  That  is  your  letter? 
A.  I  believe  it  is,  yes,  sir. 

"Q.  And  I  notice  elsewhere  that  you  state  that  if  the  cor- 
rection of  the  violations  was  compelled,  it  would  result  in 
the  shutting  down  cf  a  lot  of  schools  ?  A.  Pardon  me.  I  do 


70         INVESTIGATION  OF  AFFAIRS  OF  NEW  YOEK  CITY 

not  think  that  that  is  quite  the  meaning  of  that  paragraph 
as  I  recall  it.  I  have  not  seen  it  in  some  time. 

"Q.  Well,  I  was  trying  to  be  brief.  Sometimes  I  am  brief 
at  the  expense  of  accuracy.  A.  I  meant  this,  that  the  fire 
department  have  the  right  to  close  up  any  premises  which  it 
considers  unsafe,  and  we  might  possibly  be  confronted — 
someone  might  reach  such  a  decision,  and  we  would  be  con- 
fronted with  such  a  decision. 

k*  Q.  Here  it  says,  '  In  the  event,  however,  of  the  Fire 
Department  enforcing  through  legal  proceeding  the  carry- 
ing out  of  the  orders  now  outstanding  on  our  buildings, 
there  wculd  be  no  alternative,  it  would  seem,  except  to  close 
such  structures  for  the  time  being,  either  in  whole  or  in 
part,  until  funds  had  become  available  and  the  orders 
executed.7  A.  That  is  what  I  had  reference  to. 

"  Q.  That  is  an  accurate  statement,  is  it  ?  A.  That  is  what 
I  had  reference  to.  The  Fire  Department  could  do  that. 

"Q.  I  meant  to  state  it  in  substance  in  that  form  ?  A.  Yes, 
sir. 

Senator  Downing:  Did  the  Fire  Department  close  any 
school  buildings  ? 

The  Witness :    No,  sir. 

"  Q.  Here  you  say,  '  For  instance,  in  Public  School  117, 
Brooklyn,  which  was  not  originally  intended  for  a  school 
building,  we  have  been  obliged,  much  against  the  wishes  of 
the  District  and  Division  Superintendents,  to  prohibit  the 
use  of  the  upper  floor,  owing  to  the  absence  of  enclosed  fire- 
proof stairway  and  other  items,  the  cost  of  which  was  esti- 
mated about  two  years  ago  to  be  about  $34,000,  and  no  funds 
being  available  for  the  work.7  .... 

In  reply  to  a  question  as  to  how  much  money  would  be  required 
to  correct  outstanding  fire  violations,  Superintendent  Snyder 
stated  (Vol.  Ill,  p.  1368):  "Around  four  millions  of  dollars." 
The  following  quotation  from  the  testimony  gives  Superintend- 
ent Snyder' s  recommendation  for  the  prevention  of  such  an  accu- 
mulation of  nncorrected  violations.  (Vol.  Ill,  p.  1381). 

"Q.  Now  what  is  +he  matter  with  the  system?  A.  Why, 
the  system  was  that  there  has  never  been  a  policy — the  Board 
of  Education  was  never  in  a  position  to  fix  a  policy  and  go 
ahead  and  do  the  work  systematically  and  know  what  it  could 
do  this  vear  and  next  vear  and  the  vear  after  that. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  71 

'*  Q.  Because  they  didn't  have  the  money  ?  A.  They  didn't 
have  the  right  to  fix  a  policy. 

"Q.  To  have  the  money?  A.  I  wouldn't  put  it  that  way. 
They  didn't  have  the  right  to  fix  a  policy  and  the  ability  to 
carry  it  out  when  once  fixed. 

"Q.  Where  would  you  vest  that  power,  where  should  it  be 
vested  so  as  to  insure  it  being  carried  out?  A.  I  think  all 
these  things  resolve  themselves  simply  down  to  this,  that 
the  Board  of  Education  either  should  be  absolutely  independ- 
ent and  handle  its  own  affairs  and  be  able  to  fix  its  policy,  or 
should  know  that  it  is  not  independent  and  must  bow  to  the 
city  departments  or  something  of  the  kind.  It  is  either  one 
thing  or  the  other,  and  everything  can  be  traced  to  that  one 
thing. 

aQ.  Would  you  regard  the  system  under  which  this  large 
accumulation  of  fire  violations  occurs,  is  wrong,  needs  cor- 
rection ?  A.  I  believe  it  does ;  yes,  sir. 

"  Q.  By  statute,  by  law  ?  A.  Whatever  is  necessary  to 
bring  it  about.  You  know  better  than  I  do. 

"Q.  By  law  ?    A.  Some  way  that  it  should  be  done. 

"  Q.  And  there  should  be  some  power  in  connection  with 
the  Board  of  Education  which  will  enable  it  to  meet  these 
violations  of  the  fire  prevention  rules  as  they  come  up  ?  A. 
Yes,  sir ;  and  anything  else  that  comes  up. 

aQ.  Well,  particularly  these?     A.  Yes,  sir." 

c.     Failure    to   Repair   Fire   Damage   to   Board    of   Education 

Building 

In  February,  1918,  the  seventh,  eighth  and  ninth  floors  of  the 
Hall  of  the  Board  of  Education,  at  500  Park  Avenue,  housing  the 
executive  offices  of  the  Board,  were  completely  burned  out.  Bids 
for  the  rebuilding  of  these  floors  were  not,  however,  opened  until 
December  7,  1921,  nearly  four  years  after  the  fire.  During  this 
interval  the  work  of  the  Board  has  been  seriously  interfered  with 
because  of  compulsory  vacancy  of  the  three  top  floors  of  its  build- 
ing. The  Bureau  of  School  Buildings,  for  example,  had  to  be 
moved  to  inadequate  quarters  in  the  Municipal  Building,  several 
miles  away  from  the  other  offices  of  the  Board.  The  delay  in 
agreeing  on  new  plans,  in  securing  an  appropriation  and  in  letting 
the  contract  lays  the  Board  of  Education  open  to  the  most  serious 
criticism.  "No  business  corporation  would  tolerate  such  slovenly 
and  inefficient  methods. 


72         INVESTIGATION  OF  AFFAIRS  OF  ^N"EW  YORK  CITY 

The  following  extract  from  the  testimony  of  the  President  of 
the  Board  of  Education  on  this  subject  is  illuminating  (Vol.  Ill, 
p.  1325)  : 

"  Q.  Was  there  a  fire  in  the  Board  of  Education  Build- 
ing ?  A.  *  *  *  Yes,  in  our  building. 

"  Q.  In  your  building  ?    A.  In  February,  I  think,  1918. 

"Q.  What  did  that  do?  A.  Well,  it  destroyed,  I  think, 
the  three  upper  floors  of  the  building. 

"  Q.  How  many  floors  have  you  got  ?  A.  It  is  a  9 -story 
building. 

"  Q.  Did  you  need  that  room  ?  A.  Yes,  we  needed  it  badly. 

"  Q.  You  have  needed  it  badly  during  all  that  time  ?  A. 
Yes. 

"  Q.  But  it  has  not  been  restored  ?    A.  No,  it  has  not. 

"  Q.  Only  a  temporary  roof  put  on  it  ?    A.  That  is  all. 

"  Q.  Is  anything  being  done  now  to  correct  it  ?  A.  Yes. 
The  Department  is  working  on  plans.  The  Building  Bureau 
is  working  on  plans. 

"  Q.  That  is,  the  Building  Bureau  of  the  Board  of  Educa- 
tion ?  A.  Of  the  Board  of  Education. 

"  Q.  Haven't  they  worked  on  plans  before  ?  A.  Plans 
have  been  prepared,  yes. 

"  Q.  They  must  have  had  the  plans  in  the  same  year  it 
burned,  didn't  they  ?  A.  No,  we  had  no  appropriation  that 
year. 

"  Q.  You  have  to  get  plans  before  you  get  an  appropria- 
tion, don't  you?  A.  Yes,  but  I  think  we  prepared  plans 
but  failed  to  secure  an  appropriation. 

'"*  Q.  That  is,  you  prepared  the  plans  in  19.18  ?  A.  I  am 
not  sure.  I  think  in  1918,  yes. 

"  Q.  Right  after  the  fire?  A.  And  thereafter,  I  think  the 
plans  were  changed.  They  were  to  change  the  stairways  and 
make  some  other  changes  in  the  building. 

"  Q.  When  were  tbey  changed  ?  A.  Well,  that  I  can  not 
tell  you.  The  details  as  to  that  the  Building  Superintendent 
has. 

"  Q.  Who  recommended  the  changes,  the  same  Bureau  ? 
A.  I  think  the  members  of  the  Board  requested  changes,  and 
I  think  perhaps  the  Superintendent  of  Schools. 

"  Q.  Well,  now,  this  plan  for  the  repair  of  this  building 
was  submitted  to  the  Board  of  Estimate  when,  first?  A.  I 
can't  tell  you,  Senator. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  73 

"  Q.  1918?  A.  I  couldn't  say;  I  would  have  to  get  the 
facts  on  that;  I  couldn't  remember  the  dates. 

"  Q.  It  has  been  pending  a  long  time  ?  A.  They  were 
pending  a  long  time,  yes. 

"Q.  November  27,  1918,  my  records  show?  A.  They 
were  subsequently  changed. 

"  Q.  And  presented  again  June  25,  1919,  the  record 
shows,  and  then  again  in  July  and  then  again  March,  1920, 
and  then  in  May,  1920,  so  you  have  made  abundant  applica- 
tion to  the  Board  of  Estimate  ?  A.  I  have  followed  that  up 
pretty  closely  myself  personally.  We  were  anxious  to  get  in 
the  building  to  have  the  building  repaired  and  we  were  over- 
crowded, and  as  I  say,  we  were  very  anxious  to  get  in  there. 

"  Q.  You  have  needed  the  room  all  the  time,  it  was  occu- 
pied before  the  fire,  wasn't  it?  A.  It  was  necessary  to  have 
some  of  our  departments  housed  outside  of  the  building,  be- 
cause of  lack  of  space  there,  due  to  the  fire. 

"  Q.  I  say,  it  was  occupied  when  the  fire  occurred  ?  A. 
It  was. 

"  Q.  You  have  needed  it  ever  since  ?  A.  We  have. 

"  Q.  You  have  had  to  hire  some  rooms  outside  ?  A.  We 
have. 

"  Q.  To  what  extent  ?  A.  Well,  we  are  not  hiring  any 
rooms  outside  but  we  are  occupying  city  owned  property. 

"  Q.   City  property  ?     A.  Yes." 

d.     Incomplete  By-Laws  and  Delayed  Minutes 

Matters  of  less  public  importance  but  of  almost  equal  signifi- 
cance as  indicating  the  degree  of  efficiency  with  which  the  Board 
of  Education  has  administered  the  new  Education  Law  are  those 
relating  to  the  revision  of  the  Board's  by-laws  and  the  prepara- 
tion of  its  minutes.  The  new  law  of  1917  so  changed  the 
organization  and  scheme  of  the  school  system  that  a  complete  re- 
vision of  the  by-laws  was  necessary  in  order  to  make  them  con- 
form with  the  new  statute.  This  complete  revision  had  not, 
however,  been  made  up  to  September  12,  1921,  when  the  Presi- 
dent of  the  Board  of  Education  was  examined  on  this  point  by 
the  Committee.  A  few  sections  had  been  adopted  in  new  form, 
but  the  great  bulk  of  the  by-laws  was  still  in  the  form  of  a  vol- 
ume published  in  1914  with  literally  hundreds  of  amendment 
slips  pasted  to  the  appropriate  pages,  many  of  which  antedate 


74         INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

the  law  of  1917  and  in  the  form  of  special  documents  containing 
salary  schedules  as  enacted  by  the  Legislature. 

A  Board  which  can  permit  a  delay  of  nearly  four  years  in  the 
preparation  and  adoption  of  by-laws  to  govern  the  administration 
of  the  public  school  system  of  which  it  is  the  head,  cannot  escape 
criticism  on  the  ground  of  incapacity  or  lack  of  interest  in  the 
great  responsibility  with  which  it  is  charged. 

The  Board  has  also  tolerated  during  its  term  of  office  a  condi- 
tion which  no  business  house  would  permit  to  exist  for  a  moment. 
The  minutes  of  Board  meetings  are  records  of  the  greatest  import- 
ance to  teachers,  board  members,  board  officers  and  city  authori- 
ties as  they  are  the  official  documents  setting  forth  the  Board's 
determinations  and  decisions.  The  last  volume  of  minutes,  how- 
ever, to  be  furnished  with  a  printed  index  is  that  for  1915.  The 
index  for  1916  is  said  to  be  completed,  but  it  has  not  yet  gone  to 
the  printer.  A  delay  of  five  years  in  indexing  current  minutes  is 
inexcusable.  Another  instance  of  the  dilatoriness  permitted  by 
the  Board  is  the  fact  that  it  takes  the  secretary's  office  about  two 
months  to  issue  printed  minutes  of  Board  meetings.  The  Com- 
mittee has  been  on  the  mailing  list  for  these  minutes  and  on  the 
day  that  this  statement  is  written  (December  7,  1921)  the  last 
meeting  for  which  minutes  have  been  received  is  that  of  Septem- 
ber 28,  1921,  and  those  minutes  came  only  a  few  days  ago.  There 
has  been  a  constant  lag  of  about  two  months  between  board 
meeting  and  receipt  of  minutes  ever  since  the  Committee  started 
inquiry  in  this  direction. 

It  is  generally  agreed  that  a  small  Board  of  Education  can  be 
more  efficient  than  a  large  board,  and  that  the  abolition  of  the 
former  board  of  46  members  was  most  desirable.  It  seems  quite 
certain,  however,  that  a  Board  of  Education  of  seven  members  is 
too  small  for  the  City  of  New  York.  Boards  of  Education  in 
other  cities  of  the  state  number  from  three  to  nine  members; 
about  twenty  cities  having  boards  of  nine ;  about  twenty-five  cities 
having  boards  of  from  five  to  seven,  and  the  others  having  boards 
of  from  three  to  five.  It  is  not  logical  that  New  York,  the  largest 
city  of  the  state,  should  have  a  Board  of  Education  smaller  than 
the  Board  of  Education  in  twenty  other  cities  with  far  less  inhab- 
itants. The  New  York  Board  of  Education  should  be  large  enough 
to  handle  its  problems  effectively  and  yet  not  so  large  as  to  be 
unwieldy,  and  its  term  of  office  should  be  uniform  with  the  terms 
af  office  of  Boards  of  Education  in  the  other  cities  of  the  state. 


REPORT  OF  JOINT  LEGISLATIVE   COMMITTEE  75 

It  seems  equally  certain  that  the  statutes  should  impose 
some  means  for  guaranteeing  the  quality  of  the  local  appoint- 
ments to  the  Board  of  Education.  Appointment  should  be  made 
on  the  basis  of  qualification  for  the  duties  to  be  performed.  An 
appointing  officer  with  unrestricted  power  to  appoint  is  subject 
to  a  degree  of  external  political  pressure  to  which  it  is  difficult 
not  to  respond,  and  political  considerations  should  play  no  part 
in  the  selection  of  members  of  a  Board  of  Education. 

From  the  foregoing  account  of  the  division  of  responsibility 
between  city  and  educational  authorities  under  the  present  stat- 
ute, it  is  also  clear  that  the  only  remedy  lies  in  so  amending  the 
law  as  to  centralize  power  in  a  single  agency.  If  the  Board  of 
Education  is  to  be  responsible  for  the  proper  conduct  of  the 
schools,  it  should  have  the  power  to  carry  out  its  program  without 
hindrance. 

2.  Possibilities  of  conflict  between  the  Board  of  Education  and 
the  Superintendent  of  Schools,  relative  to  their  respective  powers. 

Cinder  the  Greater  New  York  Charter,  the  Board  of  Education 
had  specific  power  to  enact  by-laws  "  defining  the  duties  of  the 
city  superintendent  of  schools."  The  Education  Law  of  1917  re- 
pealed this  section  of  the  charter  (Section  1068)  and  did  not 
enact  an  equivalent. 

In  addition  to  this  negative  act,  it  specifically  constituted  the 
Superintendent  of  Schools,  "  the  chief  executive  officer  of  such 
board"  (of  education),  and  gave  him  power  subject  to  the  by- 
laws, "  to  enforce  all  provisions  of  law  and  all  rules  and  regu- 
lations relating  to  the  management  of  the  schools."  He  was  also 
given  specific  jurisdiction  over  the  employees  of  the  Board  of 
Education. 

The  material  for  a  serious  controversy  between  the  Board  and 
its  Superintendent  was  thus  at  hand  and  controversy  developed. 
The  new  Board  of  Education  adopted  new  by-laws,  defining  the 
powers  of  its  President,  of  the  Board  and  of  its  subordinates. 
The  Superintendent  of  Schools  felt  that  his  prerogatives  under 
the  statute  had  been  invaded  by  these  by-laws  and  appealed  to  the 
State  Commissioner  of  Education  for  relief.  The  Commissioner 
upheld  him  and  directed  the  Board  to  amend  its  by-laws  so  as  to 
eliminate  the  objectionable  provisions.  The  significance  of  the 
decision  by  the  Commissioner  is  indicated  bv  the  alterations  that 


76 


INVESTIGATION  OF  AFFAIRS  OF  .NEW  YORK  CITY 


were  made  by  the  Board  pursuant  to  his  injunction,  some  of  which 
are  quoted  below. 


First    Version 

See.  3.  "Any  salaried  officer,  clerk 
or  other  employee  may  be  suspended 
by  the  President  or  Superintendent  of 
Schools.  .  .  ." 

Sec.  4,  Par.  2.  "  The  President  shall 
exercise  general  supervision  over  the 
transaction  of  the  business  affairs  of 
the  Board  of  Education  and  shall 
have  the  power  to  require  that  re- 
ports be  made  to  him  by  any  officer 
or  employee  for  his  use  and  informa- 
tion, or  for  presentation  to  the  Board 
for  its  consideration  and  action.  The 
Superintendent  of  Schools  shall  act 
in  the  administration  of  business  af- 
fairs under  the  advice  and  guidance 
of  the  President." 

First   Version 

Sec.  6,  Par.  5.  The  Superintendent 
of  Schools  "  shall  recommend  to  the 
Board  of  Education  the  organization 
of  day  and  evening  schools  and  other 
educational  and  recreational  activi- 
ties into  major  divisions,  each  of 
which  shall  be  supervised  by  an  asso- 
ciate superintendent,  to  be  assigned 
by  the  Superintendent  of  Schools, 
subiect  to  the  approval  of  the  Board 
of  Education." 

Sec.  6,  Par.  8.  Relative  to  the  Su- 
perintendent of  Schools,  "  In  his  ab- 
sence or  inability  to  servo,  the  Board 
of  Education  shall  designate  an  as- 
sociate superintendent  to  serve  as 
acting  Superintendent  of  Schools." 

Sec.  7,  Par.  10.  Relative  to  the 
Board  of  Superintendents,  "  It  shall 
make  rules  and  regulation?  with  the 
approval  of  the  Board  of  Education 
for  the  admission  of  pupils  to  the 
schools,  for  their  promotion,  gradua- 
tion and  for  their  transfer  from  one 
school  to  another." 


Amended    Version 
"Any  salaried  officer,  clerk  or  other 
employee   may    be   suspended   by   the 
Superintendent  of  Schools.  .  .  .'•' 


"  The  President  shall  perform  the 
functions  that  appertain  to  the  office 
of  a  presiding  officer.  The  Board 
may  require  that  reports  be  made  for 
its  consideration  arid  action  by  any 
officer  or  employee." 


Amended  Version 

The  Superintendent  of  Schools 
"  shall  recommend  to  the  Board  of 
Education  the  organization  of  day 
and  evening  schools  and  other  edu- 
cational and  recreational  activities 
into  major  division?.  Each  of  said 
divisions  shall  be  supervised  by  an 
associate  superintendent,  to  be  as- 
signed by  the  Superintendent  of 
Schools."  " 


"  In  his  absence  or  inability  to 
serve,  he  shall  designate  an  associate 
superintendent  as  acting  superintend- 
ent of  schools." 


"  Tt  shall  make  rule*  and  regula- 
tions for  the  admission  of  pupils  to 
the  =chools,  for  their  promotion  and 
graduation  and  for  their  transfer 
from  one  pchool  to  another." 


The  testimony  of  the  Superintendent  of  Schools  before  the 
Committee  on  September  14,  1921,  on  this  subject  was  as  follow? 
(Vol.  Ill,  p.  1407)  : 

"  Q.  I  understood  you  to  say  that  reasonable  coordination 
could  be  expected  from  the  educational  system  as  it  is  now 


BEPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  77 

organized;  that  is,  between  the  Board  of  Education  and  the 
Superintendent  and  the  Board  of  Associate  Superintendents. 
That  works  well,  does  it  ?  A.  Within  the  Board,  yes.  That 
is,  between  the  Board  of  Education,  the  Board  of  Superin- 
tendents, and  the  Superintendent  of  Schools. 

"  Q.  They  cooperate  with  a  reasonable  degree  of  success 
and  efficiency  ?  A.  Yes,  sir,  they  do  now. 

"  Senator  Downing :     In  harmony  ? 

"  The  Witness :  Yes.  It  took  a  good  while  to  get  har- 
mony, naturally.  I  might  explain  here  that  this  new  law 
created  an  entirely  new  condition,  and  the  tradition  was  in 
the  Board  of  Education  that  affairs  should  be  carried  on  as 
they  had  been  carried  on  before  this  law,  and  in  the  carrying 
out  of  the  business  of  the  Board,  there  may  have  been  a 
little  conflict  with  the  powers  of  the  Superintendent  of 
Schools,  as  he  conceived  them,  and  the  Superintendent  of 
Schools,  of  course,  in  his  high  regard  for  the  sacredness  of 
his  office,  had  to  protest  against  any  such  action  and  appeal 
to  the  State  Commissioner.  That  was  perfectly  natural. 
There  was  not  any  acrimony  on  either  side.  It  was  simply 
a  definition  of  powers.  It  took  two  years  to  straighten  that 
out. 

"  Q.  You  have  it  straightened  out  now  ?  A.  Yes,  sir,  it 
is  straightened  out  now. 

"  Q.  And  the  present  workings  are  smooth  ?  A.  At  pres- 
ent, yes,  sir." 

A  situation  where  a  Board  of  Education,  nominally  the  head 
of  a  school  system,  is  by  statute  given  inferior  powers  to  those  of 
one  of  its  subordinates,  is  unwholesome  and  subversive  of  dis- 
cipline. It  is  hard  to  see  how  a  self-respecting  Board  of  Educa- 
tion could  acquiesce  in  such  a  condition.  Responsibility  and 
authority  should  be  placed  in  the  same  hands.  If  a  Board  of 
Education  is  not  deemed  competent  to  administer  the  affairs  of 
the  school  system,  the  remedy  lies  not  in  elevating  an  appointee 
of  that  Board  to  a  position  superior  to  that  of  the  Board  itself, 
but  in  changing  the  character  of  the  Board. 

A  continuance  of  this  unwholesome  condition  would  be  most 
unfortunate.  The  Board  of  Education  should  be  the  unquestioned 
fiscal  and  policy  determining  head  of  the  school  system  and  it 
should  have  full  power  to  delegate  to  its  subordinates  the  responsi- 


78         INVESTIGATION  OF  AFFAIES  OF  .NEW  YOKK  CITY 

bility  of  carrying  out  the  policies  upon  which  it  determines. 
It  is  of  course  true  that  a  Board  of  Education  has  not  the  technical 
pedagogical  training  possessed  by  the  professional  staff  and 
that  lay  interference  in  the  actual  teaching  of  the  children 
might  be  most  dangerous,  and  that  certain  safeguards  must 
be  established  by  law  which  will  insure  a  reasonable  degree  of 
freedom  to  the  professional  head  of  the  school  system.  On  the 
other  hand  there  is  ample  evidence  that  the  law  under  which 
the  Board  of  Education  now  operates  does  not  satisfactorily 
meet  this  problem.  In  a  city  like  New  York,  which  has  the 
greatest  educational  problem  in  the  world,  it  does  not  necessarily 
follow  that  the  professional  schoolman  best  qualified  to  carry  out 
the  educational  program  of  the  schools  will  also  possess  the  quali- 
fications to  supervise  the  strictly  business  duties  of  the  school 
system,  such  as  the  purchase  of  supplies,  the  construction  and 
alteration  of  buildings,  the  assignment  of  janitors  and  other  em- 
ployees, etc.,  even  if  he  had  the  time.  In  a  smaller  city,  where 
these  business  matters  do  not  constitute  the  burden  that  they  do 
in  New  York,  the  Superintendent  may  be  able  to  exercise  the  two 
functions  without  detriment  to  either.  This  is  not  likely,  how- 
ever, ever  to  be  true  in  New  York  City,  and  yet  under  the  present 
Education  Law  the  Superintendent  of  Schools  is  made  the  execu- 
tive officer  of  the  Board  of  Education,  with  jurisdiction  not  only 
over  the  educational  side  of  the  Board's  work,  but  also  over  the 
Board's  business  activities.  Authority  should,  therefore,  be  given 
to  the  Board  of  Education  to  delegate  the  non-professional  and 
administrative  duties  to  some  officer  other  than  the  Superintend- 
ent of  Schools,  if  it  deems  it  wise  to  do  so. 

3.  Possibility  of  Conflict  Between  the  Board  of  Education  and  the 
Municipal  A  uthorities  Relative  to  their  Respective  Powers 

The  repeal  of  most  of  the  educational  chapter  of  the  charter 
and  the  enactment  of  an  entirely  new  statute  changing  the  rela- 
tionship between  the  Board  of  Education  and  the  city  authorities 
afforded  an  opportunity  for  either  friction  or  co-operation  in  the 
working  out  of  the  new  relationship.  From  the  records  it  appears 
that  it  was  friction  and  not  co-operation  which  resulted,  and  this 
in  spite  of  the  fact  that  the  Board  of  Education  was  composed 
wholly  of  persons  appointed  by  the  present  Mayor. 

The  chief  points  at  issue  are  set  forth  fully  in  a  brief  submit- 
ted on  April  4,  1919,  by  the  Superintendent  of  Schools  to  a  Com- 


• 

I 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  79 

mittee  of  the  Board  of  Regents,  requesting  relief  from  "the  unlaw- 
ful control  of  the  public  school  system  ...  by  the  municipal 
authorities."  This  brief  noted  the  following  points. 

1.  That    the   municipal    authorities    diverted    the    State    school 

moneys  for  1918  amounting  to  some  $2,300,000  from  the 
Board  of  Education  to  the  general  fund  for  the  reduction 
of  taxation,  following  the  provisions  of  Sec.  1102  of  the 
charter  instead  of  Sec.  880  of  the  Education  Law. 

2.  That  the  municipal  authorities  sought  to  control  educational 

policies  and  administrative  details  by  a  minute  segregation 
of  appropriations  and  the  imposition  of  terms  and  condi- 
tions. 

3.  That  the  municipal  authorities   assumed  a  jurisdiction  over 

administrative  employees  of  the  Board  and  by  withholding 
their  pay  worked  great  hardship. 

4.  That  the  municipal  authorities  sought  to  gain  entrance  into 

the  school  system  and  establish  jurisdiction  over  school  affairs 
through  the  intrusion  of  the  Commissioner  of  Accounts  into 
the  business  of  the  Board. 

That  the  attitude  of  the  Mayor,  as  indicated  by  his  oral  and 
written  utterances,  was  significant  of  the  relationship  be- 
tween the  City  and  the  school  authorities. 


The  Mayor's  attitude  toward  school  affairs  was  further  devel- 
oped in  the  testimony  of  the  Committee,  copies  of  letters  written 
by  him  having  been  read  into  the  record. 

Extracts  from  these  letters  and  from  others  in  the  Committee's 
possession  follow: 

(Vol.  Ill,  p.  1272)  From  the  Mayor  to  Mr.  Prall,  Nov.  25, 
1918. 

The  by-laws  anow  pending  and  supported  by  Superintend- 
ent Ettinger  would  place  that  department  in  a  position  that 
would  require  all  reports  upon  investigations  ordered  by 
the  Board  of  Education  to  come  to  the  Board  through  the 
Superintendent.  This  is  part  of  a  policy  which,  if  persisted 
in,  makes  the  Superintendent  a  dictator  and  practically  the 
superior  of  the  Board  of  Education. 

"Superintendent  Ettinger  is  submissive  to  and  is  practi- 
cally controlled  by  Cook,  the  Auditor,  who  is  the  trouble- 
maker in  the  Board  of  Education  and  has  little  regard  for 
the  expenditure  of  money  appropriated  for  educational  pur- 
poses. 


80         INVESTIGATION  OF  AFFAIES  OF  J^EW  YORK  CITY 


"I  regret  to  be  obliged  to  write  you  about  this,  but  unless 
the  Board  of  Education  puts  an  end  to  the  dictation  of  Cook, 
through  Ettinger,  there  is  little  hope  that  we  will  be  able  to 
accomplish  anything  for  the  improvement  of  school  condi- 
tions in  this  city.  A  year  has  almost  passed  and  practically 
nothing  in  a  constructive  way  has  been  accomplished  by  the 
new  Board  of  Education. 

"Won't  you  please  exercise  the  rights  given  you  under  the 
law  to  see  that  the  Board  of  Education  and  not  the  subordi- 
nates run  the  schools  of  this  City  ?  " 

When  questioned  about  the  "Cook"  referred  to  in  this  letter, 
President  Prall  testified,  "He  is  an  auditor,  a  very  good  auditor; 
understands  his  business  thoroughly.  We  depend  on  him  abso- 
lutely." 

"Q.  He  has  the  confidence  of  the  Board  ?  A.  We  depend 
on  him  absolutely. 

"Q.  He  has  the  confidence  of  the  Board  ?    A.  He  has. 
"Q.  And  Ettinger  the  same  ?    A.  Yes,  sir. 

(Vol.  Ill,  p.  1277)  From  the  Mayor  to  Mr.  Prall,  June  27, 
1919. 

"My  Dear  Commissioner:  I  wish  you  would  confer  with 
the  members  of  the  Board  of  Education  and  see  to  it  that 
no  increases  in  salary  are  made  in  the  Educational  Depart- 
ment, until  such  time  as  we  find  how  financial  matters  stand 
in  the  Department. 

"Cook,  Ettinger  and  Company  have  so  bungled  matters 
that  it  will  be  hard  to  straighten  things  out." 

(Vol.  Ill,  p.  1277)  From  the  Mayor  to  Mr.  Prall,  June  14, 
1919. 

"Dear  Sir:  I  note  that  Superintendent  Ettinger,  who  is 
anxious  to  have  the  Legislature  increase  his  salary  by  $5,000, 
which  the  Board  of  Estimate  and  Apportionment  opposed, 
is  attempting  to  give  the  public  the  impression  that  the  Board 
of  Estimate  and  Apportionment  is  opposed  to  keeping  open 
the  swimming  pools  in  the  public  schools.  This  is  absolutely 
false,  and  Ettinger  knows  it. 

"There  has  been  $45,000,000  appropriated  by  the  present 
Board  of  Estimate  and  Apportionment  for  the  public  schools 
of  the  city,  and  out  of  that  there  will  be  sufficient  to  pay  the 
few  attendants  necessary,  the  cost  of  which  is  less  than 
$7,000,  to  look  after  the  swimming  pools  for  the  summer. 


BEPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  81 

"  Ettinger  had  no  trouble  in  finding  money  out  of  the 
$45,000,000  to  start  new  activities  so  that  his  friends  could 
get  high  salaried  jobs  and  increases  in  salary  for  other  Ettin- 
ger favorites. 

"A  man  who  resorts  to  such  methods  to  mislead  the  public 
is  not  the  proper  person  to  be  Superintendent  of  the  Schools 
of  the  City  of  New  York." 

On  August  6,  1919,  the  Mayor  referred  to  the  Police  Commis- 
sioner for  investigation  an  anonymous  letter  charging  that  the 
Superintendent  of  Schools  had  improperly  pensioned  a  teacher. 
The  Police  Department  made  an  investigation  and  reported  on 
Sept.  3,  1919,  naturally  finding  nothing  to  support  the  accusa- 
tion as  all  pensions  are  under  the  jurisdiction  of  the  Teachers' 
Retirement  Board  and  not  under  the  Superintendent  of  Schools. 

On  September  2,  1920,  the  Mayor  wrote  President  Prall  as 
follows: 

"Dear  Sir:  I  am  in  receipt  of  your  letter  of  September 
1st  with  reference  to  the  refusal  of  the  Department  of 
Finance  to  honor  the  payrolls  of  the  Board  of  Education 
so  that  the  teaching  force  will  receive  the  increases  granted 
them  under  the  mandatory  legislation  passed  by  the  Legis- 
lature at  its  last  session. 

"The  Board  of  Education  should  immediately  begin  man- 
damus proceedings  against  the  Comptroller  to  compel  him 
to  pay  the  salaries  now  legally  due  the  teachers. 

"  I  have  directed  Corporation  Counsel  O'Brien  to  confer 
with  you  without  delay  to  the  end  that  the  teachers'  salaries 
be  paid  without  any  further  quibbling." 

On  September  23,  1919,  the  Mayor  wrote  President  Prall  in 
part  as  follows: 

1 '  Ettinger  bitterly  opposed  the  investigation  of  the  expen- 
ditare  of  $44,000,000  appropriated  for  educational  purposes. 
He  now  seems  to  have  the  City  Club  behind  him  to  help  him 
thwart  your  investigation  of  the  finances  of  the  educational 
department  and  ether  conditions  in  our  school  system.  The 
Board  of  Education  should  take  some  action  so  that  Ettinger 
will  give  his  time  to  educating  the  children  and  bettering 
conditions  in  our  public  schools  instead  of  playing  education 
politics  and  making  trouble  for  those  who  want  school-houses 
erected  and  the  children  given  a  proper  education." 


82         INVESTIGATION  OF  AFFAIRS  OF  JN"EW  YORK  CITY 

On   December    4,    1919,   the   Mayor   wrote   tho   Corporation 
Counsel  as  follows: 

"  Dear  Mr.  Burr :  I  congratulate  you  upon  your  success 
in  the  Court  of  Appeals  in  the  case  of  Hirshfield,  Commis- 
sioner of  Accounts  of  the  City  of  New  York  against  Cook, 
Auditor  of  the  Educational  Department.  I  understand  the 
decision  was  unanimous  in  favor  of  the  city  investigating 
the  financial  condition  of  the  educational  system. 

"  The  Board  of  Education  have  at  all  times,  as  you  know, 
been  in  favor  of  a  thorough  investigation  of  the  financial 
condition  of  the  educational  system  under  Superintendent 
Ettinger,  but  this  policy  was  opposed  by  Superintendent  Et- 
tinger  and  Auditor  Cook,  and  other  prominent  persons  in  the 
city  who  for  some  reason,  feel  that  the  taxpayers  should  not 
know  what  is  being  done  with  their  money.  However,  the 
Court  of  Appeals  has  sustained  the  city's  contention  and  the 
investigation  can  now  go  on. 

"  If  Ettinger  and  Cook  had  not  been  encouraged  by  Fine- 
gan  of  the  State  Educational  Department  they  would  not 
have  attempted  to  override  the  action  of  the  Board  of  Educa- 
tion, their  superiors,  and  the  people  of  this  city  would  have 
known  long  ago  whether  the  finances  of  the  Board  of  Educa 
tion  were  being  properly  expended. 

"  The  decision  of  the  Court  of  Appeals  should  be  suffi- 
cient to  convince  Superintendent  Ettinger  that  his  superiors, 
the  Board  of  Education,  must  be  recognized,  and  that  he  can- 
not override  them  with  the  aid  of  Deputy  Einegan  at 
Albany. 

"  Superintendent  Ettinger  can  now  devote  his  time  to  the 
proper  housing  and  education  of  the  children  and  the  better- 
ing of  the  moral  tone  of  the  schools  of  the  city. 

''  The  people  of  the  city  appropriate  millions  of  dollars 
yearly  for  the  better  education  of  their  children.  They 
want  a  sufficient  number  of  school-houses  to  properly  house 
the  little  ones  and  a  thorough  fundamental  education  given 
to  them.  They  do  not  want  their  money  wasted  for  unneces- 
sary textbooks,  fads,  frills  and  fancies. 

"  It  is  a  pleasure  to  remember  that  the  great  judges  of  the 
Court  of  Appeals  have  stood  by  the  people  and  against  the 
traction  interests  in  their  fight  for  an  increased  fare,  and 
again  by  the  people  and  against  those  in  the  school  system 


KEPOKT  OF  JOINT  LEGISLATIVE  COMMITTEE  83 

who  objected  to  the  people  knowing  what  is  done  with  the 
millions  they  appropriate  yearly  for  education,  as  well  as 
the  many  other  important  cases  which  are  of  great  interest 
and  importance  to  the  people." 

On  December  9,  1919,  President  Prall  wrote  the  Mayor  as  fol- 
lows (Vol.  Ill,  p.'  1282)  : 

"  My  Dear  Mr.  Mayor :  Some  time  between  Friday  even- 
ing, December  5th,  and  yesterday  (Monday)  morning,  De- 
cember 8th,  certain  correspondence  in  my  files,  i.  e.,  all  the 
letters  received  by  the  President  of  the  Board  of  Education 
from  the  Corporation  Counsel,  and  all  the  duplicate 
copies  of  letters  sent  to  the  Corporation  Counsel  during  the 
period  from  January,  1919,  to  date,  were  surreptitiously 
removed. 

"  I,  therefore,  respectfully  request  that  you  assign  to  this 
case  capable  men  from  the  detective  bureau  of  the  Police  De- 
partment in  order  that  I  may  apprehend  the  person  or  per- 
sons guilty  of  this  outrage." 

Mr.  Prall  testified  that  he  regarded  this  as  an  important  loss 
but  that  the  guilty  parties  were  never  apprehended.  In  reply  to 
the  question  whether  there  were  any  matters  pending  at  the  time 
of  the  theft  on  which  the  correspondence  had  a  bearing  Mr.  Prall 
stated  (Vol.  Ill,  p.  1285)  : 

"  I  think  the  controversy  between  the  Superintendent  of 
Schools  and  the  Commissioner  of  Accounts  was  on  at  that 
time." 

On  December  20,  1919,  the  Mayor  wrote  President  Prall  a 
letter  in  which  the  following  statement  is  made: 

"  There  is  no  discipline  in  the  educational  system  under 
Superintendent  Ettinger.  Certain  principals  and  certain 
high  officials  spend  little  time  performing  the  duties  for 
which  they  are  paid.  Some  action  should  be  taken  by  tha 
Board  of  Education  to  punish  insubordination." 

The  person  not  already  familiar  with  conditions  in  New  York 
City  during  the  past  four  years  must  read  this  correspondence 
with  amazement.  But  even  the  foregoing  extracts  do  not  tell  the 
whole  story  of  the  antagonism  between  municipal  and  educational 
authorities. 

The  Court  of  Appeals  decided  a  case  on  November  22,  1921, 
that  may  prove  of  great  significance  in  the  future  determination 


84         INVESTIGATION  OF  AFFAIRS  OF  ,NEW  YORK  CITY 

of  the  relationship  between  municipal  and  educational  authori- 
ties, but  unless  the  City  and  the  Board  of  Education  can  agree 
as  to  the  bearing  of  this  decision  upon  the  current  business  of  the 
public  school  system  there  may  be  frequent  recourse  to  litigation 
of  a  similar  nature.  A  certain  cure  would  be  the  revision  of  the 
Education  Law  as  affecting  New  York  City.  The  decision 
referred  to  is  printed  in  the  New  York  Law  Journal  for  Decem- 
ber 20,  1921,  and  reads  in  part  as  follows: 

"  Section  880  of  the  Education  Law  provides  that  all 
funds  collecHed  or  received  from  any  source  for  school 
purposes  shall  be  paid  into  the  treasury  of  the  city  and  shall 
be  credited  to  the  board  of  education ;  that  such  funds  shall 
be  disbursed  only  by  authority  of  the  board  of  education 
and  upon  written  orders  drawn  on  the  city  treasurer  or 
other  liscal  officer  of  the  city,  such  orders  to  be  signed  by  the 
superintendent  of  schools  and  the  secretary  of  the  board  of 
education  or  such  other  officer  as  the  board  may  authorize. 
The  city  treasurer  is  inhibited  from  permitting  the  use  of 
said  funds  for  any  purpose  other  than  that  for  which  they 
are  lawfully  authorized,  or  paying  out  said  funds  except  on 
audit  of  the  board  of  education  'and  the  countersignature  of 
the  comptroller.  A  casual  reading  of  the  Education  Law 
leads  to  the  conclusion,  so  tersely  stated  in  the  Gunnison  case, 
that  the  only  relation  of  the  city  to  the  subject  of  education 
is  as  custodian  of  the  school  funds  and  to  disburse  the  same 
according  to  the  instructions  of  the  board  of  education. 

"  The  language  quoted  from  subdivision  7,  '  the  board  of 
education  shall  administer  all  moneys  appropriated  or  avail- 
able for  educational  purposes  in  the  city,  subject  to  the  pro- 
visions of  law  relating  to  the  audit  and  payment  of  salaries 
and  other  claims  by  the  department  of  finance,'  must  be 
read  in  connection  with  section  880  of  the  Education  Law, 
which  provides  that  school  funds  shall  be  disbursed  only  by 
the  board  of  education,  and  clothes  that  body  with  power  of 
audit. 

"  The  power  vested  in  the  board  of  education  to  administer 
the  school  fund  is  a  grant  of  authority  to  that  body  to  fix 
salaries  of  all  employees  of  the  board.  Such  salaries  when 
fixed  by  the  board  are  presumably  embodied  in  the  estimate- 
filed  with  the  board  of  estimate  and  apportionment.  Upon 
receipt  of  a  requisition  from  the  board  of  education  the 


KEPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  85- 

comptroller  is  authorized  to  ascertain  whether  or  not  the 
requisition  made  upon  him  embraces  charges  against  the 
education  fund  as  disclosed  in  the  record  in  his  department 
relating  to  the  board  of  education.  If  such  requisition  be 
found  correct  there  remains  but  one  duty  on  the  part  of  the 
comptroller,  viz,  to  draw  the  necessary  warrant  for  the  pay- 
ment of  the  salaries,  etc.  He  is  powerless  to  exercise  a  power 
of  audit  conferred  on  the  board  of  education.  We  cannot 
ascribe  to  the  Legislature  an  intention  to  provide  for  two 
several  boards  of  audit.  The  language  used  in  subdivision  7 
was  applicable  only  to  the  procedure  to  be  adopted  by  the 
board  of  education  that  in  the  disbursement  of  its  funds  it 
shall  adopt  the  procedure  prevailing  in  the  case  of  claims 
against  the  city,  require  as  it  did  in  the  case  at  bar  pre- 
sentation of  the  claim,  proofs  in  support  of  the  validity  of 
the  same,  the  extent  and  value  of  the  labor  and  material  and 
generally  all  information  obtainable  relating  thereto  before 
any  allowance  or  audit  of  the  same  shall  be  made.  Had 
relator  in  the  first  instance  filed  its  claim  with  the  comp- 
troller, as  is  asserted  it  should  have  done,  and  the  comptroller 
audited  the  same  for  a  stated  amount  and  drawn  a  warrant 
for  the  same  on  the  city  treasurer,  the  latter  officer  could 
not  pay  the  same  save  by  a  violation  of  the  provision  of  the 
Education  Law,  which  prohibits  the  treasurer  from  making 
payment  from  the  school  fund  except  on  audit  of  the  board 
of  education." 

It  is  regrettable,  to  say  the  least,  that  the  possibility  for  such 
controversies  should  exist  and  that  if  existing,  the  issues  should 
IIMVO  br-en  rrr'sefl.  It  is  equally  regrettable  that  it  should  have  been 
necessary  for  the  parties  to  such  disputes  to  have  recourse  to  the 
courts,  to  the  Regents  and  to  the  State  Commissioner  of  Educa- 
tion, because  whichever  side  was  favored  in  the  decisions,  the 
litigation,  confusion  and  consequent  irritation  must  necessarily 
react  on  the  children  whose  education  is  suffering  from  the  dis- 
agreement between  school  and  city  authorities.  So  far  as  the 
wording  of  the  statutes  affords  an  excuse  for  such  conditions  the 
statutes  should  be  amended  and  the  excuse  removed. 

This  decision  of  the  Court  of  Appeals  lends  judicial  sanction  to 
the  suggestion  that  the  dual  control  over  school  moneys  hereto- 
fore exercised  or  claimed  be  ended,  by  specifically  excluding  the 
municipal  authorities  from  any  control  over  school  funds. 


86         INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

4>  Failure  to  Concentrate  in  Clear  and  Unmistakable  Language 

Full  Responsibility  for  the  Proper  Administration  of  the 

Public  School  System  Either  on  the  Municipal  Authorities, 

the  Board  of  Education  or  the  State  of  New  York 

The  evidence  to  support  this  interpretation  is  adequately  set 

forth  under  the  two  sub-divisions  immediately  preceding.     It  is 

only  necessary  to  add  here  that  if  the  S+ate  is  to  assume  full 

responsibility  for  the  proper  administration  of  the  New  York 

City  school  system  it  should  enunciate  that  fact  in  clear  terms 

and  should  specifically  repeal  those  sections  of  the  charter  and 

other  local  laws  in  conflict  with  that  theory. 

5.  Limitation  of  the  Powers  of  the  Board  of  Education 

This  point  has  been  touched  upon  under  sub-division  2  above. 
The  powers  of  the  present  Board  of  Education  are  demonstrably 
far  inferior  to  those  of  its  predecessor.  It  cannot  be  successfully 
argued  that  the  powers  of  a  Board  of  Education  should  be  limited 
in  favor  of  one  of  its  subordinates,  or  that  if  local  control  is  desir- 
able the  Board  should  be  unable  to  modify  or  dispense  with  two 
powerful  agencies  nominally  subordinate  to  it,  viz.,  the  Board 
of  Superintendents  and  the  Bureau  of  Compulsory  Education. 
The  State  Education  Law  in  so  far  as  it  applies  to  the  City  of  New 
York  clearly  curtails  the  power  of  the  Board  of  Education.  It 
does  not  seem  that  the  experience  of  the  past  four  years  indicates 
that  this  was  a  wise  provision.  So  long  as  responsibility  and 
authority  are  not  entrusted  to  the  same  hands  there  is  encourage- 
ment for  an  evasion  of  obligation  and  a  shifting  of  blame  for 
non-performance.  And  in  all  cases  of  this  character  the  ultimate 
sufferers  are  the  children  for  whose  benefit  Boards  of  Education, 
Boards  of  Superintendents  and  school  officers  are  supposedly 
created. 

6.  Great  Increase  in  the  Powers  of  the  Superintendent  of  Schools 
This  matter  has  also  been  discussed  at  length  under  sub-division 

2  above  and  it  will  not  be  further  dealt  with  here. 

7.  Perpetuation  of  the  Board  of  Superintendents 

The  Board  of  Superintendents  is  a  unique  institution.  It  is  an 
inheritance  from  the  time  of  consolidation  (1898)  when  it  was 
apparently  deemed  desirable  to  carry  over  into  the  structure  of 
the  Greater  City  local  officers  of  the  Boards  of  Education  of  New 
York  and  Brooklyn.  It  survived  all  the  amendments  to  the 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  87 

Greater  New  York  charter  and  was  continued  in  the  education 
law  of  1917  as  a  mandatory  institution.  But  this  law  while  pro- 
viding a  general  statute  for  all  cities  of  the  State,  established  a 
Board  of  Superintendents  only  in  the  City  of  New  York  by  the 
common  expedient  of  creating  such  a  board  in  "a  city  having  a 
population  of  one  million  or  more."  It  is  hard  to  see  why  the 
requirements  of  a  city  with  a  population  of  over  a  million  should 
differ  so  materially  from  those  of  a  city  of  under  a  million.  If  a 
proper  school  administration  requires  a  Board  of  Superintendents 
in  the  one  case,  why  does  it  not  require  a  Board  of  Superintend- 
ents in  the  other  case  ?  And  if  a  Superintendent  and  a  group 
of  Assistant  Superintendents  can  operate  successfully  in  a  city  of 
less  than  a  million,  why  should  it  be  necessary  for  a  larger  city  to 
place  its  educational  administration  in  the  hands  of  a  board  of 
nine  persons  and  to  be  able  to  make  progress  only  when  a  majority 
of  such  board  can  be  secured.  The  opportunity  for  discussion  by 
a  board  cannot  always  be  said  to  accelerate  school  business.  The 
President  of  the  Board  of  Education  sought  to  explain  the  delay 
of  his  Board  in  adopting  by-laws  by  saying  that  the  Board  of 
Superintendents  had  been  considering  a  draft  of  by-laws  "I  guess 
for  a  year,  perhaps  for  two  years."  Examination  of  the  minutes 
of  the  Board  of  Superintendents  shows  the  many  discussions  and 
the  many  references  and  reports  relative  to  matters  which  should 
be  settled  by  prompt  executive  action.  The  records  show  that  one 
of  the  major  contributing  factors  to  the  delay  which  has  charac- 
terized the  provision  of  additional  school  facilities  is  the  fact 
that  the  Board  of  Superintendents  has  to  originate  the  program 
and  approve  the  layout  of  the  new  buildings  contemplated  therein. 
Much  time  could  be  saved  in  the  working  out  of  an  educa- 
tional program,  and  that  the  management  of  the  schools  would 
be  much  more  efficient,  if  the  Board  of  Superintendents  were 
abolished  as  a  board,  and  if  the  Superintendent  of  Schools,  with 
a  staff  of  competent  Assistant  Superintendents,  was  made  the 
agent  of  the  Board  of  Education  in  the  carrying  out  of  educationa] 
policies. 

8.     Perpetuation    of    the    Bureau    of    Compulsory    Education, 

School  Census  and  Child  Welfare 

Reference  has  already  been  made  to  the  provision  of  law,  mak- 
ing mandatory  a  Bureau  of  Compulsory  Education,  School  Census 
and  Child  Welfare.  The  State  Education  Law,  passed  in  1917, 
id  not  single  out  this  bureau  for  special  recognition.  It  was 


88         INVESTIGATION  OF  AFFAIRS  OF  .New  YOEK  CITY 

left  on  a  parity  with  the  other  administrative  bureaus  of  the  Board, 
subject  to  modification,  abolition  and  consolidation  by  the  Board 
of  Education. 

Chapter  612,  Laws  of  1920,  however,  added  a  new  section  to  the 
State  Education  Law,  placing  the  Bureau  of  Compulsory  Educa- 
tion ID  the  mandatory  class  with  the  Board  of  Superintendents 
and  the  Board  of  Examiners.  This  amendment  applied  only  to 
the  City  of  New  York  as  it  was  worded  to  affect  "  a  city  having 
a  population  of  one  million  or  more." 

Mandatory  legislation  of  this  character  affecting  only  the 
City  of  New  York,  particularly  when  in  the  form  of  amend- 
ments to  general  State  acts,  should  not  be  passed  unless  there 
is  a  compelling  reason  in  its  favor.  It  is  hard  to  believe 
that  any  such  compelling  reason  existed  in  the  case  of  the  statute 
in  question.  If  the  enforcement  of  the  compulsory  education  law, 
in  the  City  of  New  York,  requires  the  organization  of  a  Bureau 
of  Compulsory  Education,  the  Board  of  Education  can  be  relied 
upon  to  establish  such  a  bureau,  but  if  the  Board  of  Education 
prefers  to  enforce  the  compulsory  education  law  through  some 
agency  other  than  a  specially  constituted  bureau,  it  should  be 
permitted  to  do  so. 

It  is  the  prerogative  of  the  State  to  enact  <a  compulsory  educa- 
tion law  and  to  hold  Boards  of  Education  responsible  for  its 
enforcement.  It  should  be  the  privilege  of  the  Boards  of  Educa- 
tion to  determine  the  machinery  by  which  such  enforcement  is  to 
be  carried  out,  and  the  Board  of  Education  of  New  York  should 
have  the  same  privilege  in  this  respect  as  is  enjoyed  by  the  other 
cities  of  the  State. 

9.  Conflict  between  Section  1102  of  the  Charter,  which  was  not 
specifically  repealed,,  and  the  State  Education  Law,  relative 
to  the  disposition  to  be  made  of  the  City's  share  of  the 
State  school  moneys,  the  former  providing  that  such  money 
be  credited  to  the  City's  general  fund  for  the  reduction  of 
taxation  and  the  latter  that  it  be  credited  to  the  Board  of 
Education. 

Reference  has  been  made  to  this  matter  under  subdivision  3, 
above.  The  controversy  was  resolved  in  favor  of  the  Board  of 
Education,  and  at  the  piesent  time,  the  proceeds  of  the  State's 
apportionment  to  the  City  of  New  York  are  credited  to  the  Board 
of  Education.  That  the  amounts  now  involved  are  bv  no  means 


KEPOKT  OF  JOINT  LEGISLATIVE  COMMITTEE  89 

inconsiderable  is  shown  by  the  following  table,  giving  the  totals 
apportioned  to  New  York  for  the  calendar  years  1914  to  1922, 
inclusive : 

Amount  Apportioned 
Year  to  the  City 

1914  $1,923,025  00 

1915  2,115,679  73 

1916  2,220,730  03 

1917  2,414,837  16 

1918  2,321,191  13 

1919  ...' 2,700,657  19 

1920  5,025,570  17 

1921  16,938,023  85 

1922 *18,097,534  51 

10.  Increase  from  3  mills  to  4-9  mills  in  the  amount  which  the 
City  is  required  annually  to  appropriate  for  the  use  of  the 
Board  of  Education. 

The  State's  policy  of  prescribing  a  certain  minimum  tax  to  be 
levied  for  local  school  purposes  long  antedates  the  creation  of  the 
Greater  City. 

The  application  of  this  principle  to  the  present  City,  however, 
was  first  made  in  the  Charter,  which  took  effect  in  1898,  and 
which  prescribed  a  minimum  of  4  mills.  By  Chapter  43,  Laws  of 
1.903,  this  was  reduced  to  3  mills,  the  reduction  taking  effect  in 
the  1904  budget,  a  provision  contemporaneous  with  the  increase 
of  nearly  a  billion  and  a  half  dollars  in  the  assessed  valuation  of 
New  York  City's  real  estate,  due  to  a  change  in  the  basis  of 
assessment.  The  figure  remained  3  mills  until  the  State  Law  of 
1917  raised  it  to  4.9  mills. 

The  3  mill  tax  applied  to  the  1903  valuations  yielded,  for  the 
purposes  of  the  1904  budget,  $16,297,250.75,  as  compared  with 
$15,428,190.87,  which  was  yielded  for  the  budget  of  the  preced- 
ing year  by  the  4  mill  tax  on  1902  values,  so  the  decrease  in  rate 
really  meant  an  increase  of  $870,000  in  available  funds. 

The  following  table  shows  the  expenditures  by  the  Board  of 
Education  from  its  current  funds  for  school  purposes  from  1910, 
through  the  first  six  months  of  1921,  and  gives  also  the  1922 


Estimated. 


90         INVESTIGATION  OF  AFFAIRS  OF  ^N~E\v  YORK  CITY 

budget  appropriation  from  City  and  State  sources.  It  shows  the 
tremendous  growth  that  has  taken  place  in  the  last  few  years 
in  school  costs. 

Year  Expenditures. 

1910    $28,456,945  68 

1911    28,958,179  29 

1912   33,791,974  40 

1913    35,481,641  12 

1914   38,185,495  90 

1915    39,797,960  64 

1916    39,708,764  22 

1917    41,101,074  41 

1918    43,884,893  59 

1919    45,490,121  68 

1920    66,194,668  04 

1921  (first  6  mos.) 44,82*8,326  69 

1922    *88,79'8,546  81 

The  first  budget  affected  by  the  law  increasing  the  minimum 
provision  for  school  purposes  to  the  yield  of  a  4.9  mill  tax  was 
that  for  1918,  and  the  amount  appropriated  by  the  City  for  school 
purposes  in  that  budget  was  $42,501,156.04,  the  exact  amount  of 
the  4.9  mill  yield  as  then  computed  and  the  approximate  amount 
required  by  the  Board  of  Education  as  indicated  by  its  expendi- 
tures at  the  time.  It  seems  clear,  therefore,  that  the  legislature 
sought  to  guarantee  to  the  City's  school  system,  an  income  suffi- 
cient to  meet  its  requirements,  relying  on  increases  in  assessed 
valuation  to  provide  some  money  at  least  for  expansion,  thus 
assuring  the  Board  of  Education  a  reasonable  degree  of  financial 
independence.  The  4.9  mill  yield,  however,  has  not  proved 
wholly  adequate.  The  legislature  in  1,919  and  1920  passed  laws 
increasing  the  statutory  minimums  for  teachers'  salaries.  These 
new  schedules,  when  fully  effective,  increased  the  salaries  of 
teachers  in  New  York  City's  schools  by  about  $30,000,000  a  year. 
According  to  figures  prepared  by  the  Board  of  Education,  the 
total  salary  cost  for  teachers  as  of  December  31,  1919,  was 
$37,625,157,  and  the  cost  as  of  December  31,  1921,  for  the  same 
staff  is  estimated  at  $67,947,108. 

*  Including  $18,097,534.51  from  the  State. 


KEPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  91 

In  order  to  lighten  the  financial  burden  imposed  by  these 
mandatory  increases,  the  Legislature  undertook  to  provide  a  part 
of  the  necessary  funds  and  levied  a  direct  tax  for  educational 
purposes  to  supplement  the  local  city  taxes. 

As  shown  above,  the  State  funds  received  by  New  York  from 
1914  to  1919,  inclusive,  averaged  annually  about  $2,000,000.  In 
1921,  however,  by  reason  of  this  action  by  the  Legislature,  the 
amount  received  totals  $16,938,023  85,  and  the  estimate  for  1922 
is  $18,097,534.51. 

But  this  is  not  enough  to  offset  the  entire  additional  burden 
in  New  York,  and,  as  a  result,  the  schools  are  again  placed  in 
financial  dependence  on  the  city  authorities.  The  City's  appro- 
priation for  1922  for  school  purposes  is  $70,701,012.30,  whereas 
the  4.9  mill  tax  on  1921  valuations  yields  only  about  $50,000,000. 
The  Board  of  Education  is  therefore  dependent  en  the  City  for 
about  30%  of  its  requirements  for  current  running  expenses,  to 
say  nothing  of  its  requirements  for  new  school  buildings,  altera- 
tions and  the  like.  In  this  respect,  therefore,  the  situation  is 
no  better  than  it  was  in  1917,  when  the  Board's  budget  was 
$41,430,447.49,  or  nearly  $16,000,000  in  excess  of  the  mandatory 
3-mill  tax  of  $25,753,057.53. 

A  mojt  anomalous  situation  is  thus  created.  The  Board  of 
Education,  which  is  recognized  as  an  agent  of  the  State  by  the 
new  Education  Law,  i  at  the  mercy  financially  of  the  local  city 
authorities,  who  have  it  in  their  power  completely  to  wreck  the 
school  system.  That  this  is  a  power  that  may  be  exercised  before 
long  is  evidenced  by  two  facts. 

The  requirements  of  the  Board  of  Education  for  funds  from 
City  sources  as  set  forth  in  the  budget  for  1921  amounted  to 
$77,946,038.77,  but  because,  in  spite  of  a  most  unusual  increase 
in  the  assessed  valuations  for  1921,  the  Board  of  Estimate  found 
that  it  could  not  appropriate  the  full  amount  it  desired  to  for 
city  and  county  purposes  and  remain  within  the  2%  constitutional 
limitation  as  interpreted  by  it,  it  arbitrarily  reduced  the  amount 
appropriated  for  the  Board  of  Education  to  $50,720,880.83, 
leaving  a  deficit  of  $27,225,157.94  to  be  made  up  during  the 
year.  The  action  of  the  Legislature  in  continuing  for  another 
year  the  direct  State  levy  for  teachers'  salaries  made  an  additional 
$7,225,000  available,  reducing  the  deficit  to  $20,000,000. 

The  Board  of  Estimate  undertook  to  finance  this  deficit  by  the 
issue  of  special  revenue  bonds  and  the  transfer  of  available  bal- 


92         INVESTIGATION  OF  AFFAIRS  OF  .NEW  YORK  CITY 

ances  from  other  appropriations,  but  throughout  the  greater  part 
of  192 1,  the  Board  of  Education  had  no  assurance,  other  than  the 
statement  of  the  Board  of  Estimate,  that  the  necessary  funds  for 
the  support  of  the  schools  would  be  provided  by  the  city.  This 
first  move  by  the  city  authorities  can  be  summarized  as  an  arbi- 
trary refusal  to  appropriate  in  the  annual  budget  a  sufficient  sum 
for  school  purposes,  coupled  with  the  undertaking  to  make  up  the 
deficit  from  other  city  sources  during  the  year. 

The  second  fact  is  of  more  recent  occurrence  and  it  may  be 
summarized  as  a  desire  on  the  part  of  the  city  authorities  arbi- 
trarily to  reduce  the  budget  appropriations  for  the  Board  of  Edu- 
cation below  requirements  and  to  deny  responsibility  for  the 
deficit,  passing  it  along  to  the  State.  This  is  evidenced  by  a  com- 
munication sent  by  the  Comptroller  to  the  Board  of  Aldermen, 
on  December  2,  1921,  calling  attention  to  the  fact  that  the  prob- 
able tax  rate  for  city  and  county  purposes  in  two  of  the  five 
counties  would  exceed  2%,  and  that  in  view  of  the  constitutional 
provisions,  it  would  be  safer  to  reduce  the  budget  so  as  to  bring 
the  rates  below  2%.  He  recommended  that  this  reduction  be 
effected  by  taking  $10,000,000  away  from  the  appropriations 
made  for  the  Board  of  Education,  saying: 

"Education  is  a  State  function,  and  because  it  was  a  State 
function  the  legislature  increased  teachers'  salaries  in  the 
City  of  New  York  at  the  rate  of  $31,000,000  per  year,  but 
when  it  came  to  providing  the  means  wherewith  to  meet  this 
increased  outlay,  the  legislature  did  not  consider  that  educa- 
tion was  a  State  function.  It  passed  this  liability  on  to  the 
City  of  New  York,  and,  in  order  that  a  show  of  economy 
might  be  made  in  the  State's  appropriation  bills,  the  amount 
provided  to  aid  the  City  of  New  York  to  carry  this  increased 
budget  was  less  than  half  of  the  sum  required. 

"Unless  the  State  is  to  be  faithless  to  the  cause  of  educa- 
tion, the  legislature  can  do  no  less  than  provide  the  necessary 
moneys  to  sustain  the  activities  in  the  manner  that  it  has 
required." 

The  significance  of  this  is  not  so  much  the  speciousness  of  the 
argument  as  the  fact  that  the  exigencies  of  municipal  finance  have 
led  the  city  authorities  to  assume  a  hostile  attitude  toward  the 
city  schools.  The  Board  of  Aldermen  wisely  rejected  the  Comp- 
troller's recommendation,  but  next  year,  it  may  very  well  be  that 
the  Board  of  Estimate,  acting  at  the  Comptroller's  instance,  may 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  93 

refuse  to  appropriate  sufficient  funds  for  the  schools,  and,  as  the 
Board  of  Aldermen  has  no  power  to  increase  appropriations, 
there  would  be  no  means  for  compelling  the  City  to  make  the 
necessary  appropriation,  so  long  as  the  statutory  minimum  of  4.9 
mills  is  provided. 

In  connection  with  the  Comptroller's  recommendation,  how- 
ever, mention  should  be  made  of  the  fact  that  the  Mayor  testified 
that  he  was  in  favor  of  the  increased  salaries  for  teachers,  con- 
cerning which  the  Comptroller  complains,  that  the  city's  finan- 
cial condition  was  and  is  such  that  it  could  not  possibly  provide 
the  money  for  these  increases  had  the  legislature  not  come  to  its 
aid  by  imposing  a  State  tax  for  the  purpose  and  that  the  amount 
to  be  received  by  the  city  during  1922,  from  State  school  moneys 
is  estimated  at  about  $4,000,000  more  than  the  amount  of  the 
direct  State  tax  which  the  city  has  had  to  include  in  the  1922 
budget,  so  that  the  city  gets  from  the  State  more  than  it  pays  by 
about  $4,000,000. 

It  seems  highly  desirable,  therefore,  that  the  Legislature  take 
the  necessary  steps  to  make  it  impossible  for  the  City  to  starve 
the  schools  at  will.  In  doing  so,  however,  regard  should  be  had, 
not  only  to  the  current  running  expenses  as  reflected  in  the  appro- 
priations to  the  general  and  special  school  funds,  but  also  to  the 
requirements  for  new  school  accommodations.  Only  half  of  the 
problem  would  be  solved  if  the  Board  of  Education  were  depend-* 
ent  on  the  City  for  funds  for  new  buildings,  because  there  is  no 
more  reason  to  assume  that  the  City,  when  confronted  by  the  con- 
stitutional debt  limit,  would  treat  the  schools  any  more  gener- 
ously than  when  confronted  with  the  constitutional  limit  on  tax- 
ing power. 

The  City's  appropriation  for  the  Board  of  Education  in  the 
1922  budget  of  $70,701,012.30  represents  about  7  mills  on  the 
1921  valuation  of  about  ten  billions.  An  increase  in  the  manda- 
tory minimum  from  4.9  mills  to  7  mills  would  therefore  insure 
sufficient  funds  to  conduct  the  schools  at  the  present  rates  of 
expenditure,  provided  the  State  continues  its  distribution  of  school 
moneys  in  the  same  amount  as  at  present.  If,  in  addition,  the 
equivalent  of  another  mill  or  fraction  thereof  were  set  aside  by 
statute  for  new  school  projects,  to  be  provided  by  taxation  or  bond 
issue,  the  Board  of  Education  would  have  the  assurance  of  a  defi- 
nite sum  annually  for  such  purposes. 


94         INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

The  total  expenditure  from  1910  to  the  middle  of  1921  for  new 
buildings  and  sites  was  $46,092,839.88,  making  an  average 
annua]  expenditure  of  $4,008,073.03  during  this  period.  This 
amount  has  demonstrably  been  insufficient  to  keep  pace  with  the 
growing  requirements  of  the  City  and  it  should  not  be  a  criterion 
in  determining  the  funds  to  be  made  available  by  the  City  in  the 
future  for  such  purposes.  On  the  other  hand,  the  City's  financial 
condition  is  such  that  it  cannot  be  expected  to  make  up  at  once  the 
deficiencies  of  prior  years  in  school  construction.  The  Board  of 
Education  could  easily  and  advantageously  spend  many  more 
millions  than  the  City  could  furnish.  It  is  necessary,  therefore, 
to  effect  a  compromise  based  on  the  City's  financial  ability  and  the 
requirements  of  the  schools  and  adequate  to  give  the  Board  of 
Education  the  necessary  financial  independence. 

11.  The  inclusion  within  the  State's  educational  system,  of  City 
Boards  of  Education,  including  the  Board  of  Education 
of  the  City  of  New  York  and  the  subordination  of  the 
municipal  authorities  to  the  State  in  matters  of  school 
administration. 

The  foregoing  discussion  demonstrates  that  the  apparent  at- 
tempt by  the  new  State  Law  of  1917,  to  secure  this  change  in  the 
relationship  between  the  City,  the  Board  of  Education  and  the 
State,  was  not  successful.  The  present  division  of  responsibility, 
while  differing  from  the  preceding  division  of  responsibility,  is- 
none  the  less  embarrassing  and  is  not  conducive  to  the  efficient 
administration  of  the  schools.  The  history  of  public  education  in 
New  York  State  shows  that  the  State  has  increasingly  concerned 
itself  with  the  education  of  its  children.  Generally  speaking, 
however,  its  concern  has  been  to  see  to  it  that  the  local  authorities 
fulfilled  their  responsibilities.  The  details  of  school  administra- 
tion were  left  to  communities,  while  the  State  prescribed  general 
requirements,  supervised  the  carrying  out  of  these  requirements,, 
appropriated  money  to  help  meet  these  requirements  and  passed 
laws  which  sought  to  guarantee  a  proper  education  to  its  future 
citizens.  Experience  seems  to  show  that  this  is  a  wise  position 
for  the  State.  It  cannot  successfully  and  should  not  centralize  in 
its  own  hands  the  administrative  control  of  local  schools.  It  can, 
however,  exercise  general  supervision,  establish  minimum  require- 
ments, set  up  local  agencies  to  administer  the  affairs  of  local 
schools,  and  see  to  it  that  these  agencies  are  not  interfered  with 


KEPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  95 

in  the  performance  of  their  duty.  Education  is  not  a  State  func- 
tion, it  is  a  State  responsibility.  The  guaranteeing  that  every 
child  in  every  community  shall  have  an  opportunity  for  education, 
however,  is  a  State  function  and  so  is  the  exercise  of  compulsion 
on  local  communities  to  provide  adequate  educational  facilities. 
The  State  can  enunciate  that  principle  and  it  can  establish  in 
New  York  City  a  Board  of  Education  with  complete  financial 
independence,  subject  to  restrictions  imposed  by  the  State  and  the 
State  only.  The  City  can  be  compelled  to  furnish  the  necessary 
funds,  but  in  the  interests  of  the  taxpayer  these  funds  must  be 
provided  out  of  the  2  per  cent  tax  which  the  City  may,  under  the 
constitution,  levy  for  city  and  county  purposes. 


DEVELOPMENT    OF    PUBLIC    EDUCATION    IN    THE 
STATE  AND  CITY  OF  NEW  YORK  PRIOR  TO  1897.* 


HISTORICAL   DEVELOPMENT   OF  THE  EDUCATIONAL   SECTION  OF 
THE  STATE  CONSTITUTION 

Article  IX,  section  1  of  the  Constitution  of  the  State  of  New 
Irork  reads  as  follows : 

"  The  Legislature  shall  provide  for  the  maintenance  and 
support  of  a  system  of  free  common  schools,  wherein  all  the 
children  of  this  State  may  be  educated." 

This  section  was  added  to  the  Constitution  by  the  Constitu- 
tional Convention  of  1894  upon  the  recommendation  of  the  Com- 
mittee on  Education  which  reported  an  educational  article  of 
which  the  foregoing  was  the  first  section.  The  Committee's  report 
contained  the  following  statement: 

"  The  present  Constitution  is  silent  upon  the  vital  point 
of  the  establishment  and  maintenance  of  a  system  of  free 
common  schools.  It  may  be  urged  that  no  imagination  can 
picture  this  State  refusing  to  provide  education  for  its 
children,  and  for  this  reason  the  declaration  which  your  com- 
mittee have  reported  in  section  1  might,  no  doubt,  be  omitted 
without  endangering  the  stability  of  our  present  system  of 
education.  But  the  same  reasoning  would  apply  to  many 
other  matters  though  fundamental ;  and  it  is  a  significant  fact 
that  within  the  last  half  century  of  constitutional  revision 
no  other  State  of  the  Union  has  considered  it  superfluous  or 
unwise  to  make  such  an  affirmation  in  its  fundamental  law. 
Your  committee,  therefore,  recommends  the  adoption  of 


*Mbst  of  the  historical  material  presented  here  has  been  taken  from  Lin- 
coln's "  Constitutional  History  of  New  York,"  vol.  Ill,  pp.  475-580,  and  from 
Palmer's  "  The  New  York  Public  School."  In  many  instances  sentences  have 
been  borrowed  bodily,  and,  generally  speaking,  there  has  been  little  more  than 
summarization  and  rearrangement  of  the  material  collected  by  these  authors. 
Material  has  also  been  taken  from  the  School  Inquiry  Report  published  in 
1913  by  the  Board  of  Estimate,  especially  from  vol.  Ill,  pp.  45-108. 

[96] 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  97 

section  1  as  an  explicit  direction  to  the  legislature  to  pro- 
vide for  a  system  of  free  common  schools  wherein  all  the 
children  of  this  state  may  be  educated.  This  requires,  not 
simply  schools,  but  a  system;  not  merely  that  they  shall  be 
common,  but  free,  and  not  only  that  they  shall  be  numerous, 
but  that  they  shall  be  sufficient  in  number,  so  that  all  the 
children  of  the  state  may,  unless  otherwise  provided  for, 
receive  in  them  their  education.  ~No  desire  to  confine  the 
new  Constitution  to  the  narrowest  possible  limits  of  space 
should  prevent  the  adoption  of  an  enactment  declaring  in  the 
strongest  possible  terms  the  interest  of  the  state  in  its  com- 
mon schools.  Whatever  may  have  been  their  value  hereto- 
fore, and  language  has  been  strained  to  the  utmost  in  apply- 
ing to  them  terms  of  praise,  their  importance  for  the  future 
cannot  be  overestimated.  The  public  problems  confronting 
the  rising  generation  will  demand  accurate  knowledge  and 
the  highest  development  of  reasoning  power  more  than  ever 
before ;  and,  in  view  of  the  state's  policy  as  to  higher  educa- 
tion, to  which  reference  will  presently  be  made,  too  much 
attention  cannot  be  called  to  the  fact  that  the  highest,  leader- 
ship is  impossible  without  intelligent  following,  and  that 
the  foundation  of  our  educational  system  must  be  permanent, 
broad,  and  firm  if  the  superstructure  is  to  be  of  real  value." 

The  Constitutional  Convention  of  1894  found  an  educational 
system  in  two  parts,  one  culminating  in  the  University  Law  cf 
1892  and  the  other  in  the  Common  School  Law  of  1894.  In 
addition,  there  were  numerous  independent  statutes  relating  to 
both  departments  of  education.  The  Convention  combined  both 
branches  in  one  educational  article  and  the  state  electorate  by 
adopting  the  revised  constitution  definitely  declared  that  ele- 
mentary, secondary  and  higher  education  should  be  maintained 
at  public  expense  within  limitations  prescribed  by  the  State 
Legislature.  By  this  action  there  was  incorporated  in  the  funda- 
mental law  of  the  State  a  policy  which,  as  a  matter  of  fact,  had 
existed  for  many  years  through  legislation.  The  constitutional 
provision  unified  the  two  systems  above  referred  to,  but  both 
systems  were  prior  to  1894  subject  to  State  control. 

The  following  brief  sketch  of  the  development  of  a  public  edu- 
cational policy  in  the  State  of  New  York  shows  the  gradual  forma- 
tion of  a  new  conception  that  public  education  was  a  vital  con- 
cern of  the  State. 


98         INVESTIGATION  OF  AFFAIRS  OF  Jfajw  YORK  CITY 


Dutch  Colonial  Period 

The  Dutch  were  firm  believers  in  education  and  carried  to  the 
new  world  their  determination  to  provide  for  the  instruction  of 
their  youth.  An  ofiicial  school  and  school  master  were  provided 
in  New  Amsterdam  as  early  as  1633.  During  the  Dutch  control 
of  New  York  the  expense  of  maintaining  the  schools  was  some- 
times paid  in  part  from  the  treasury  of  the  Dutch  West  India 
Company,  sometimes  from  excise  moneys,  sometimes,  apparently, 
by  general  tax  and,  in  addition,  teachers  derived  a  part  of  their 
income  from  direct  payment  by  pupils.  Keligious  and  secular 
instruction  were  combined  in  the  same  course  and  the  same  per- 
son was  often  both  minister  and  school  master.  The  Dutch  West 
India  Company  began  the  administration  of  the  colony  which  it 
was  permitted  to  establish  in  America  by  invoking  the  direct  aid 
of  the  minister  and  the  school  master.  A  union  of  church  and 
state  was  not  then  deemed  objectionable.  But  while  the  govern- 
ment through  the  church  and  sometimes  by  direct  taxation 
encouraged  the  formation  of  schools,  it  did  not  consider  itself 
responsible  for  the  development  of  a  consistent  and  comprehensive 
educational  policy  for  the  children  of  the  colony. 

English  Colonial  Period,  1664  —  1776 

The  transfer  of  Xew  York  from  Dutch  to  English  control  in 
1664  had  little  immediate  effect  on  the  educational  policy  of  the 
colony.  The  Dutch  policy  was  not  interrupted,  but  as  the  Eng- 
lish apparently  did  not  regard  education  as  an  essential  subject 
of  public  administration,  little  was  done  to  foster  schools  at  pub- 
lic expense.  English  teachers  were  licensed  to  teach  schools,  but 
usually  without  public  aid.  The  colonial  government  acting 
under  orders  from  the  crown  tried  to  keep  the  control  of  educa- 
tion as  a  prerogative  of  the  Church  of  England,  and,  accord- 
ingly, under  the  instructions  of  colonial  governors  school  masters 
were  permitted  to  teach  only  if  licensed,  first  by  the  Archbishop 
of  Canterbury  and  later  in  the  history  of  the  colony  by  the  Bishop 
of  London.  During  the  first  few  years  of  English  jurisdiction 
school  masters  were  also  required  to  obtain  a  civil  license  from 
the  governor,  but  this  practice  later  fell  into  disuse.  Education, 
while  not  discouraged  by  the  •  government,  was  left  largely  to1 
private  enterprise,  but  under  public  control,  and  the  schools  were 
maintained  either  directly  or  indirectly  by  private  contributions 
including  the  direct  payment  of  tuition  and  the  funds  admin- 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  99 

istered  by  some  society  organized  for  that  or  similar  purposes. 
The  English  "  Society  for  the  Propagation  of  the  Gospel  in  For- 
eign Parts/'  for  example,  carried  on  an  extensive  educational 
work  in  the  colony,  establishing  schools,  appointing  teachers  and 
often  supporting  them  out  of  its  own  treasury.  But  while  the 
schools  were,  during  the  latter  half  of  the  English  Colonial  period 
under  the  general  care  and  supervision  of  this  Society,  the  gov- 
ernment kept  its  hand  on  the  school  system  directly  and  through 
the  instrumentality  of  the  church  by  the  requirements  as  to  the 
licensing  of  teachers  referred  to  above,  and  not  by  direct  legis- 
lation of  a  general  character. 

Only  two  statutes  were  enacted  by  the  English  Colonial  gov- 
ernment of  Xew  York  relating  directly  to  education  and  neither 
of  these  disclosed  any  intention  to  establish  a  public  school  sys- 
tem. The  first  was  passed  in  1702  and  recited  that  the  munici- 
pal authorities  of  Xew  York  had  represented  to  the  general 
assembly  the  importance  of  establishing  in  that  city  a  free  school. 
The  assembly  thereupon  made  provision  for  a  grammar  school 
and  directed  that  an  annual  tax  of  £50  be  raised  to  maintain  the 
school.  The  act  was  to  continue  in  force  seven  years.  It  was  not 
then  extended.  The  second  statute  was  passed  in  1732  and 
authorized  a  school  in  Xew  York  for  the  teaching  of  Latin, 
Greek  and  mathematics.  This  school  was  to  be  free,  its  expenses 
being  paid  from  moneys  received  from  licenses  to  hawkers  and 
peddlers.  The  act  was  limited  to  five  years.  It  was  then  con- 
tinued for  another  year,  but  was  not  again  renewed.  This  seems 
to  have  been  the  last  attempt  to  establish  public  schools  during 
the  Colonial  period. 

Education  under  Hie  First  Constitution,  1777  — 1821 

Education  was  given  no  place  in  the  first  constitution.  The 
Legislature  was,  therefore,  left  free  to  act  as  it  saw  fit  with 
respect  to  schools.  The  Revolutionary  War,  of  course,  absorbed 
much  if  not  most  of  the  Legislature's  energy  and  the  first  definite 
recognition  of  school  needs  was  tacked  on  to  an  act  providing  for 
the  raising  of  t\vo  regiments  for  volunteer  service  and  for  boun- 
ties of  public  land  to  encourage  enlistments.  By  this  act  (Chap- 
ter 32,  Laws  of  1781)  the  State  reserved  in  each  township  five 
hundred  acres  of  public  land  for  the  support  of  the  gospel  and 
three  hundred  and  sixty  acres  for  the  use  of  the  school.  The 
policy  of  appropriating  public  lands  for  these  purposes  was  con- 
tinued by  subsequent  legislation,  and,  according  to  a  report  by 


100       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

the  Superintendent  of  Public  Schools  in  1839,  there  had  been 
thus  reserved  up  to  that  time  as  gospel  and  school  lands  47,620 
acres.  This  policy  obviously  was  not  applicable  to  all  parts  of  the 
State  and  necessarily  could  have  only  a  limited  effect.  It  was 
only  an  incident  in  the  State's  educational  development. 

What  is  said  to  be  the  earliest  official  declaration  of  a  state 
educational  program  is  found  in  a  statement  by  Governor  George 
Clinton  to  the  special  session  of  the  Legislature  called  in  1782 
to  devise  means  for  more  vigorous  prosecution  of  the  war.  He 
is  quoted  as  having  said : 

"  *  *  *  it  is  the  peculiar  duty  of  a  government  of  a 
free  state  where  the  highest  employments  are  open  to  citi- 
zens of  every  rank  to  endeavor  by  the  establishment  of 
schools  and  seminaries  to  diffuse  that  degree  of  literature 
which  is  necessary  to  the  due  discharge  of  public  trusts. 
You  must  be  sensible  that  the  war  has  occasioned  a  chasm 
in  education  extremely  injurious  to  the  rising  generation, 
and  this  affords  an  additional  consideration  for  extending 
our  earliest  care  to  their  instruction." 

In  1784  the  Governor  repeated  his  views  and  the  Legislature 
passed  an  act  to  establish  a  university  under  a  Board  of  Regents. 
If  this  university  had  been  erected  on  a  broad  foundation  with- 
out reference  to  any  particular  institution  then  existing,  it  could 
have  supervised  all  education,  but  the  intervention  of  Kings  Col- 
lege brought  about  amendments  which  concentrated  011  Columbia 
College  (the  later  name  for  King's  College)  the  energies  of 
friends  of  education  in  the  State.  This  law  of  1784  was 
amended,  materially  altered  in  1787  and  in  the  latter  form  was 
the  basis  of  the  University  Law  of  1892. 

The  Committee  of  Regents  which  recommended  the  modifica- 
tion of  1787  in  the  University  Law  made  the  first  direct  reference 
to  public  common  schools  as  such,  stating  that: 

"  They  feel  themselves  bound  in  faithfulness  to  add  that 
the  erecting  of  public  schools  for  teaching  reading,  writing 
and  arithmetic  is  an  object  of  very  great  impoTtance  which 
ought  not  to  be  left  to  the  discretion  of  private  men,  but  be 
promoted  by  public  authority." 

The  amended  law,  however,  contained  no  provision  for  the 
organization  of  primary  education. 

The  first  free  common  school  established  by  statute  in  a  settled 
portion  of  the  State  was  provided  for  by  Chapter  41  of  the  Laws 


REPORT  OF  JOINT  LEGISLATIVE. C0:k&£l.?Tfi*E> *••  •  //-I 01 

of  1791.  The  people  of  Clermont  asked  authorization  from  the 
Legislature  for  the  use  for  school  purposes  of  the  surplus  of  excise 
moneys  not  needed  for  the  support  of  the  poor,  and  this  authority 
was  granted  by  the  above-mentioned  act. 

In  1793,  1794  and  1795  the  Regents  repeated  their  recom- 
mendation for  the  establishment  of  public  schools  for  the  teaching 
of  reading,  writing  and  arithmetic,  and  the  Legislature  in  1795 
passed  a  Common  School  Law  (Chapter  75)  which  appropriated 
£20,000  annually  for  five  years  and  required  each  city  and  county 
to  raise  by  tax  a  sum  equal  to  one-half  the  amount  apportioned 
to  it  by  the  State.  These  two  sums  constituted  the  local  school 
fund.  There  was  no  rate  bill.  This  law  expired  in  1800  and  was 
not  renewed.  The  Legislature  of  1801,  however,  provided  for  a 
lottery  to  raise  $100,000,  one-half  of  which  was  to  be  used  by  the 
Regents  and  the  other  half  to  be  used  for  the  support  of  the  com- 
mon schools  as  the  Legislature  might  direct. 

In  1802,  1803  and  1804  the  Governor  recommended  again  that 
the  Legislature  continue  the  system  of  common  schools.  In  1805 
Governor  Lewis  sent  a  special  message  to  the  Legislature  urging 
the  adoption  of  a  liberal  policy  toward  education  and  recom- 
mending that  1,500,000  acres  of  unappropriated  land  then  owned 
by  the  State  be  devoted  to  educational  purposes;  the  funds  real- 
ized from  the  sale  thereof  to  be  placed  under  the  supervision  of  the 
Regents ;  the  interest  to  be  used  for  the  support  of  colleges,  com- 
mon schools  and  "  perhaps  of  academies."  This  plan,  if  adopted, 
would  have  unified  the  State's  educational  system  under  one  head, 
the  Regents.  The  Legislature,  however,  included  in  the  new  law 
only  that  part  of  the  plan  relating  to  a  common  school  fund  and 
set  aside  only  500,000  acres  of  unoccupied  land  for  establishing 
the  common  school  fund.  The  creation  of  this  fund  was,  appar- 
ently, the  only  result  of  Governor  Lewis'  plan  to  establish  a  gen- 
eral system  of  education. 

In  1810,  and  again  in  1811,  Governor  Tompkins  urged  legis- 
lative action  for  popular  education,  and  in  the  latter  year  the 
Legislature  appointed  a  commission  to  study  the  subject  and 
report.  The  report  was  submitted  in  1812  accompanied  by  a  bill 
which,  with  modifications,  became  Chapter  242.  This  law  pro- 
vided for  a  Superintendent  of  Common  Schools,  for  the  distribu- 
tion of  the  interest  of  the  common  school  fund;  authorized  the 
election  of  town  commissioners  and  inspectors  of  schools;  re- 
quired teachers  to  be  examined  and  licensed  by  the  inspectors: 
provided  for  school  districts  in  towns,  and  required  a  local  tax 


102       T-isvKSTKjAtnEOj;  'or  AFFAIRS  OF  NEW  YOKE:  CITY 


for  school  moneys  in  addition  to  the  fund  distributed  by  the 
State  with  the  limitation  that  the  offer  of  State  aid  must  have 
been  accepted  at  a  town  meeting,  in  which  case  a  sum  equal  to 
the  State  apportionment  was  to  be  raised  by  a  town  tax.  The 
town  might  also  raise  an  additional  sum.  These  amounts  con- 
stituted the  local  school  fund.  There  was  no  rate  bill.  This  act 
•vvas  revised  and  repealed  in  1814.  By  the  new  act  the  towns 
were  required  to  raise  by  tax  an  amount  at  least  as  great  as  the 
amount  of  the  State  apportionment,  and  provision  was  made  for 
the  rate  bill  which  was  used  to  collect  money  for  teachers'  salaries 
in  excess  of  the  amount  of  the  local  school  fund.  The  rate  bill 
was  continued  in  the  revision  effected  by  Chapter  161,  Laws  of 
1819.  The  office  of  Superintendent  of  Common  Schools  was 
abolished  by  Chapter  240,  Laws  of  1821,  and  his  functions  trans- 
ferred to  the  office  of  the  Secretary  of  State. 

Education  under  the  Second  Constitution,  1S22-1SJ+6 

The  Constitutional  Convention  of  1821  gave  but  little  atten- 
tion to  the  subject  of  education.  The  common  school  fund  was 
protected  and  was  made  perpetual.  Its  foundation  was  enlarged 
to  include  the  proceeds  of  all  the  State  lands  not  otherwise  appro- 
priated. Except  for  these  provisions,  however,  the  new  constitu- 
tion contained  no  educational  material,  but  during  its  life  con- 
siderable legislation  on  this  subject  was  enacted,  much  of  it  hav- 
ing to  do  with  the  training  of  teachers.  By  Chapter  133  of  the 
Laws  of  1843  the  Legislature  abolished  the  offices  of  Commis- 
sioner and  Inspector  of  Common  Schools  and  created  the  office 
of  Town  Superintendent  of  Schools,  to  be  chosen  annually  by  the 
people.  The  same  law  authorized  the  State  Superintendent  to 
issue  teachers'  certificates  .which  could  be  used  anywhere  in  the 
State  and  were  valid  until  revoked.  This  act  completed  the 
policy  of  supervision  by  Superintendents,  including  the  State 
Superintendent,  Deputy  County  Superintendents  and  Town 
Superintendents. 

Prior  to  1846  several  separate  free  school  laws  were  enacted. 
But,  as  a  general  rule,  parents  were  required  to  pay  a  separate 
and  additional  tax  (rate  bill)  for  the  instruction  of  their  children, 
if  the  public  money  was  not  sufficient  to  pay  teachers'  wages. 
Poor  people  might,  however,  be  relieved  from  this  additional 
charge. 

A  resolution  was  offered  in  the  Assembly  of  1846  requesting 
the  Committee  on  Colleges,  Academies  and  Common  Schools  to 


REPOKT  or  JOINT  LEGISLATIVE  COMMITTEE  103 

report  on  the  expediency  of  providing  free  schools  in  all  cities 
and  also  in  all  incorporated  villages  with  a  population  of  10.000 
or  more.  The  Committee  reported  itself  in  favor  of  the  idea 
but  advised  postponing  action  until  the  Constitutional  Convention 
then  about  to  meet  could  consider  the  matter. 

Education  under  the  Third  Constitution,  1847-1894 

The  Constitutional  Convention  in  1846  considered  the  matter 
of  free  public  education  and  on  the  day  before  adjournment 
adopted  two  sections  to  be  submitted  to  the  people  separately  and 
not  as  part  of  the  Constitution.  One  section  read: 

"  The  Legislature  shall  provide  for  the  free  education  and 
instruction  of  every  child  in  the  state  in  the  common  schools 
now  established  or  which  hereafter  shall  be  established 
therein." 

The  other  section  related  to  taxation.  These  two  sections,  how- 
ever, were  reconsidered  by  the  Convention  later  in  the  same  day 
and  the  earlier  action  reversed.  The  Convention  struck  out  the 
free  school  provisions  by  a  vote  of  61  to  27. 

Numerous  petitions  were  submitted  to  the  Legislature  of  1849 
for  a  general  free  school  law.  The  Legislature  responded  and 
enacted  a  law  providing  that: 

"  Common  schools  in  the  several  school  districts  in  this 
state  shall  be  free  to  all  persons  residing  in  the  district  over 
five  and  under  twenty-one  years  of  age  "  and  that  "  free  and 
gratuitous  education  shall  be  given  to  each  pupil "  in  all 
public  schools. 

A  free  school  law  was  such  a  radical  departure  from  the  exist- 
ing policy  of  the  State,  however,  that  the  Legislature  decided  to 
submit  this  new  law  to  the  electors.  It  was  approved  by  them  at 
the  November,  1849,  election  by  a  vote  of  249,872  to  91,951  and 
became  effective  January  1,  1850.  The  constitutionality  of  the 
law  was  attacked  because  of  the  provision  requiring  its  submis- 
sion to  the  people  before  becoming  effective,  and  in  1853  the 
Court  of  Appeals  held  it  to  be  unconstitutional  (8  N.  Y.  483). 

This  decision  had  little  practical  effect  because  the  law  had  been 
repealed  in  1851,  many  complaints  having  been  made  of  the 
oppressive  tax  burden  on  account  of  free  schools.  Chapter  151 
of  the  Laws  of  1851  was  enacted  to  provide  relief  and  restored 
the  rate  bill.  In  1855  Governor  Clark  recommended  that  the  rate 
bill  be  abolished  and  that  schools  be  made  entirely  free,  but  the 


104       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

revised  school  law  of  1864  (Chapter  555)  continued  it  in  force. 
In  1867  Governor  Fenton  made  a  similar  recommendation  and 
the  Legislature  by  Chapter  406  did  abolish  all  rate  bills,  thus 
making  the  schools  really  free. 

In  1853  (Chapter  433)  the  Legislature  sought  to  encourage 
the  establishment  of  schools  by  providing  for  the  union  of  two  or 
more  districts,  or  parts  of  districts,  in  one  school  under  the  imme- 
diate supervision  of  a  Board  of  Education.  These  union  free 
schools,  while  in  their  general  character  common  schools,  might 
have  an  academic  department.  Thus  there  was  a  union  of  common 
and  academic  education  in  the  same  school.  The  academic  de- 
partment was,  however,  under  the  general  supervision  of  tlio 
Regents.  In  other  respects  the  Board  of  Education  had  the 
"superintendence,  management  and  control  of  the  school."  This 
law  did  not  specifically  give  the  Superintendent  of  Common 
Schools  any  supervision  over  a  union  school  but  laws  relating  to 
the  powers  and  duties  of  trustees  of  common  schools  .were  made 
applicable  to  boards  of  education. 

The  Superintendent  of  Public  Instruction  whose  office  was  cre- 
ated by  Chapter  97  of  the  Laws  of  1854  was  practically  the  suc- 
cessor of  the  former  Superintendent  of  Common  Schools.  He 
was  specifically  required  to 

"  visit  as  often  as  may  be  practicable  such  and  so  many  of 
the  common  schools,  academies  and  other  literary  institu- 
tions of  the  state  as  he  may  deem  expedient ;  to  inquire  into 
the  course  of  instruction,  management  and  discipline  of  such 
institutions,  and  to  report  the  results  of  such  visitation  and 
inspection  annually  to  the  Legislature,  with  such  recom- 
mendations and  suggestions  as  he  may  deem  suitable.7' 

In  1856  -Governor  Clark  recommended  the  abolition  of  the 
office  of  Town  Superintendent  and  the  creation  of  local  Boards  of 
Education.  He  also  urged  the  more  thorough  supervision  of 
schools,  and  the  Legislature,  by  Chapter  179  of  the  Laws  of  1856,. 
created  the  office  of  School  Commissioner  in  each  assembly  dis- 
trict except  in  the  counties  of  New  York  and  Kings,  to  whom  was 
given  the  general  power  of  visitation,  inspection  and  supervision 
of  common  schools  in  his  district.  He  was  also  authorized  to 
grant  teachers'  licenses  and  to  hold  teachers'7  institutes  subject  to 
rules  prescribed  by  the  state  superintendent.  The  same  act  abol- 
ished the  office  of  Town  Superintendent  of  Common  Schools. 


EEPOKT  OF  JOINT  LEGISLATIVE  COMMITTEE  105 

By  Chapter  555  of  the  Laws  of  1864  the  general  acts  relating 
to  public  instruction  were  revised  and  consolidated.  Union 
schools  were  made  subject  to  the  visitation  of  the  Superintendent 
of  Public  Instruction,  who  was  also  made  responsible  for  the 
"  general  supervision  of  its  board  of  education  and  their  man- 
agement and  the  conduct  of  all  its  departments  of  instruction." 
The  Superintendent  was  also  empowered  to  remove  members  of 
^  Board  of  Education.  As  a  result,  a  double  supervision  was 
established  for  union  schools  with  academic  departments,  the 
Superintendent  being  one  of  the  instruments  and  the  Board  of 
Regents  the  other.  And,  similarly,  there  was  a  double  inspection 
and  distribution  of  State  funds.  This  duplication  of  function 
continued  until  the  unification  act  of  1904. 

The  Convention  of  1867  included  a  free  school  provision  in 
its  draft  of  the  Constitution.  The  Commission  of  1872  con- 
sidered but  did  not  adopt  propositions  relating  to  compulsory 
education  and  free  common  school  instruction.  The  Legislature 
of  1876  passed  a  free  school  amendment  to  the  Constitution,  but 
it  was  not  agreed  to  by  a  subsequent  Legislature  and  was  not, 
therefore,  submitted  to  the  people  for  acceptance.  Not  until 
1894  were  effective  steps  taken  toward  the  inclusion  of  a  free 
education  section  in  the  state  constitution.  The  constitutional 
convention  of  that  year  adopted  the  section  quoted  at  the  begin- 
ning of  this  sketch  and  that  section  has  remained  ever  since  as 
a  part  of  the  state  constitution. 

Summary 

The  foregoing  summary  of  the  development  of  constitutional 
free  public  education  in  New  York  shows  clearly  that  the  pro- 
cess was  not  a  consistent  one.  The  present  system  is  an  outgrowth 
of  a  variety  of  conflicting  ideas  and  tendencies.  Most  of  the 
progress  has  been  of  comparatively  recent  years. 

The  Dutch  Colonists  had  a  lively  regard  for  the  value  of  edu- 
cation, but  it  was  not  free  state  education.  It  was  church  educa- 
tion sanctioned  and  encouraged  by  the  state.  The  English 
Colonists  had  no  conception  of  free  public  education.  There  were 
no  public  schools  at  the  end  of  the  colonial  period.  The  general 
policy  was  to  leave  education  to  individual  effort.  The  govern- 
ment felt  itself  absolved  from  responsibility.  If  the  people 
desired  schools  they  could  have  them  by  paying  for  them.  The 
church  would  license  proper  teachers  and  the  schools  could  be 
supported  by  private  contributions. 


106       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

This  was  me  educational  inheritance  of  the  new  State.  The 
first  education  law  passed  by  the  new  state  government  had 
to  do  with  the  establishment  of  a  state  university.  There  was 
no  recognition  of  any  need  for  state  common  schools.  The  evi- 
dent purpose  of  the  first  University  Law  was  to  establish  a  private 
educational  institution  and  not  to  institute  a  comprehensive  sys- 
tem of  public  education.  The  differentiation  between  the  two 
ideas  is  shown  by  the  fact  that  when  the  Legislature  passed  the 
first  Common  School  Law  (1795)  the  Regents  of  the  state  uni- 
versity were  not  made  the  instrumentality  for  administering  the 
new  law.  The  university  had  to  do  with  private  educational 
institutions  while  the  state  government  was  then  about  to  try 
an  experiment  in  public  education.  The  Legislature,  accordingly, 
left  the  university  at  one  side  and  used  means  with  which  they 
were  familiar,  namely,  the  township  governments.  Township 
government  was  a  colonial  inheritance  and  was  recognized  and 
perpetuated  by  the  first  constitution  of  the  State,  which  guar- 
anteed to  the  people  of  the  town  the  right  to  elect  their  own  officers. 
The  towns  themselves  had  an  organized  government  and  it  was 
natural  that  the  State  should  resort  to  these  local  governments 
for  the  machinery  to  carry  out  the  new  plan.  It  is  also  probable 
that  the  New  England  township  school  policy  had  an  influence 
in  shaping  the  New  York  statute.  Massachusetts  in  1789,  six 
years  before  the  New  York  law,  had  enacted  a  common  school 
law  by  which  each  town  was  directed  to  maintain  public  schools. 
There  was  no  central  administration  at  all,  the  whole  subject, 
including  taxation,  being  committed  to  the  people  of  the  town, 
who  might  subdivide  the  town  into  school  districts.  The  New 
York  law  was  constructed  on  this  model.  The  town  was  made 
the  basis  of  school  administration  and  taxation,  and  local  officers 
were  made  responsible  for  the  enforcement  of  the  law.  The 
New  York  statute  was  strikingly  different  in  one  respect,  how- 
ever, in  that  the  state  contributed  funds  from  its  treasury  for  the 
support  of  local  schools,  while  in  Massachusetts  the  schools  were 
maintained  wholly  at  local  expense.  In  neither  State  was  there 
any  central  state  supervision. 

A  speech  by  Governor  Clinton  in  1802  indicates  that  the  first 
Common  School  Law  was  a  failure.  The  revival  of  the  common 
school  plan  in  1812  included  the  idea  of  local  supervision  but 
added  the  element  of  state  supervision  by  a  Superintendent  of 
Common  Schools.  The  duties  of  this  office  were  transferred  to  the 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  107 

Secretary  of  State  in  1821,  who  administered  them  until  1854 
when  the  office  of  State  Superintendent  of  Public  Instruction  was 
created.  Since  1812  the  State  has  maintained  an  unbroken  policy 
of  supervising  public  schools  through  one  state  officer  or  another. 
The  growth  of  educational  policy  in  the  state  of  New  York 
was  rapid  in  the  latter  part  of  the  nineteenth  century.  The  State 
increasingly  assumed  responsibility  for  the  education  of  its 
citizens.  Years  before  the  adoption  of  the  educational  section 
of  the  Constitution  of  1894  the  Legislature  was  exercising  its 
rights  with  respect  to  public  education,  and  this  gradual  develop- 
ment of  the  idea  of  state  control  over  this  matter  became  crystal- 
ized  in  the  fundamental  law  of  the  state  as  Article  IX  of  the 
Constitution  of  1894. 

THE  EVOLUTION  OF  PUBLIC  EDUCATION  IN  THE  PRESENT  CITY 

OF  NEW  YORK 

Up  to  1898  when  the  Greater  New  York  Charter  (Chapter  378 
of  the  Laws  of  1897)  became  effective,  the  history  of  education 
in  what  is  now  the  City  of  New  York  w.as  the  history  of  the 
several  independent  communities  which,  by  consolidation  at  that 
time,  or  by  earlier  consolidation  with  the  constituent  munici- 
palities, became  the  Greater  City.  Before  treating  of  the  devel- 
opment subsequent  to  1898,  therefore,  there  will  be  outlined  the 
growth  of  a  public  educational  system  in  the  former  City  of  New 
York,  in  the  City  of  Brooklyn  and  very  briefly  in  what  are  now 
the  other  two  boroughs.  These  sketches  should  afford  a  suffi- 
ciently clear  picture  of  the  experimental  and  inconsistent  char- 
acter of  the  legislative  and  other  provisions  through  which  the 
present  city's  educational  system  was  developed. 

The  earliest  history  of  education  in  the  territory  now  con- 
tained within  the  City  of  New  York  is  little  different  from  the 
general  history  of  the  State.  Up  to  the  Revolutionary  War  and 
for  some  years  thereafter  there  is  nothing  of  great  significance 
to  differentiate  the  treatment  accorded  to  schools  in  the  City  from 
that  accorded  to  schools  outside  the  City.  But  early  in  the  nine- 
teenth century  the  individual  school  history  of  the  City  began, 
and  it  is  at  that  time  that  the  following  outline  commences. 

The  Former  Ciiy  of  New  York 

In  1805  there  was  a  new  and  strictly  local  development  in 
educational  policy  in  the  shape  of  the  formation  of  a  society 
incorporated  by  the  Legislature  under  an  act  entitled  "  To  Incor- 


108       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

porate  the  Society  Instituted  in  the  City  of  New  York  for  the 
Establishment  of  a  Free  School  for  the  Education  of  Poor  Chil- 
dren who  do  not  Belong  to  or  Are  not  Provided  for  by  any 
Eeligious  Society.77 

The  school  opened  by  this  Society  in  1806  with  funds  pro- 
vided by  private  subscription  marked  the  beginning  of  what  in 
later  years  became  the  public  school  system  of  the  City.  It  scon 
became  evident  that  this  first  school  must  be  followed  by  others, 
and  in  1807  the  Society  obtained  an  appropriation  from  the 
Legislature  and  also  assistance  from  the  municipal  authorities 
to  enable  it  to  furnish  additional  educational  facilities.  These 
early  schools  were,  however,  of  a  strictly  eleemosynary  character. 

In  1808  the  Society's  name  was  changed  by  the  Legislature  to 
"  The  Free  School  Society  of  New  York  "  and  its  powers  were 
extended  to  cover  "all  children  who  are  the  proper  objects  of  a 
gratuitous  education."  The  first  apportionment  of  the  State 
common  school  fund  established  in  1805  was  made  in  1815  and 
the  Free  School  Society  then  received  $3,708.14  as  its  share  of 
the  amount  paid  to  the  City  and  County  of  New  York.  Under 
the  Act  of  1813  permitting  the  city  to  participate  in  the  common 
school  fund,  the  City's  portion  was  paid  to  the  Free  School  Society, 
the  Orphan  Asylum  Society,  the  Society  of  the  Economical  School 
in  the  City  of  New  York,  the  African.  Free  School  and  to  such 
"incorporated  religious  societies  in  said  City  as  now  support  or 
hereafter  shall  establish  charity  schools  within  the  said  City  who 
may  apply  for  the  same."  The  State  funds  thus  apportioned 
were  dedicated  solely  to  the  payment  of  teachers'  salaries. 

In  1817,  however,  the  Free  School  Society,  finding  that  the 
Lancasterian  system  was  so  economical  that  the  State  moneys 
were  more  than  enough  for  teachers'  salaries,  secured  permission 
from  the  Legislature  to  apply  the  surplus  to  the  erection  of  build- 
ings or  any  other  needful  purpose.  In  1822  the  Bethel  Baptist 
Church,  which  participated  in  the  common  school  fund  under  the 
law  of  1813,  secured  a  similar  dispensation  from  the  Legislature. 
Considerable  alarm  was  felt  by  the  Free  School  Society  and  by 
the  other  church  schools  lest  this  lead  to  a  perversion  of  State 
school  funds  to  sectarian  rather  than  to  school  purposes.  Repeated 
attempts  were  made  to  have  the  Legislature  repeal  the  exemption 
made  in  favor  of  the  Bethel  Baptist  Church,  but  without  success. 
The  scene  of  the  controversy  was  moved  from  Albany  to  New 
York  by  the  passage  of  a  law  in  1824  placing  the  distribution 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  109 


of  the  school  fund  for  ^ew  York  City  in  the  hands  of  the  Com- 
mon Council.  In  1825  the  Common  Council  passed  an  ordinance 
excluding  all  religious  societies  from  participation  in  the  income 
from  the  common  school  fund,  leaving  only  the  Free  School 
Society,  the  Mechanics'  Society,  the  Orphan  Asylum  Society  and 
the  African  Free  Schools  as  beneficiaries. 

The  Free  School  Society  was  eager  to  extend  the  field  of  its 
operations  and  in  1824  suggested  that  its  schools  which  had 
suffered  from  the  stigma  that  they  were  charity  schools  should 
also  receive  as  pupils  children  of  parents  able  and  willing  to  pay 
small  sums  for  instruction.  In  1826  the  Legislature  granted  a 
new  charter  whereby  the  Society's  name  was  changed  to  "  The 
Public  School  Society  of  Xew  York/7  whereby  the  Society  was 
permitted  to  charge  a  moderate  fee  for  instruction,  provided  that 
no  child  be  denied  the  benefits  of  education  because  unable  to 
pay  (this  pay  system  proved  unsuccessful  and  was  abolished  in 
1832),  and  whereby  the  Society  was  authorized 

"to  convey  their  school  edifices  and  other  real  estate  to  the 
Mayor,  Aldermen  and  Commonalty  of  the  City  of  New  York, 
upon  such  terms  and  conditions  and  in  such  forms  as  shall 
be  agreed  upon  between  the  parties,  taking  back  from  the 
said  corporation  a  perpetual  lease  thereof  upon  condition 
that  the  same  shall  be  exclusively  and  perpetually  applied 
to  the  purposes  of  education." 

The  Society  was  not  satisfied  with  the  adequacy  of  the  system 
of  schools  existing  in  1828.  It  estimated  that  12,000  children 
between  five  and  twelve  years  of  age  were  entirely  without  means 
of  instruction  and  it  stated  that  the  principle  which  had  led  to 
the  recent  change  from  free  schools  to  public  schools  should  be 
extended  so  that  schools  "  should  be  supported  from  public  reve- 
nue, should  be  public  property,  and  should  be  open  to  all,  not  as 
a  charity  but  as  a  matter  of  common  right.  "  The  specific  recom- 
mendation was  then  made  that  a  tax  be  levied  of  half  a  mill  upon 
the  dollar  of  assessed  city  property,  and  a  vigorous  effort  was 
made  to  arouse  public  sentiment  in  favor  of  this  tax  measure,  the 
result  being  the  enactment  by  the  Legislature  in  1829  of  a  tax 
law  levying  a  local  tax  of  one-eightieth  of  one  per  cent. 

A  controversy  as  to  the  application  of  public  school  moneys  to 
the  support  of  schools  under  the  control  of  religious  societies  com- 
menced in  1840  and  had  far-reaching  consequences.  The  Roman 
Catholic  churches  which  maintained  free  schools  requested  from 


110       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

the  Common  Council  a  share  of  the  school  moneys.  Similar 
requests  were  made  by  a  Hebrew  congregation  and  by  the  Scotch 
Presbyterian  church.  They  were  all  strenuously  opposed  by  the 
Public  School  Society  and  were  denied  by  the  Board  of  Assistant 
Aldermen.  The  Catholics  then  petitioned  the  Board  of  Alder- 
men, which  after  a  public  hearing  on  the  matter,  denied  the 
request. 

The  Legislature  was  the  next  point  of  attack  and  lengthy  mem- 
orials were  submitted  by  the  proponents  and  opponents  of  the 
plan.  All  of  these  documents  were  referred  to  John  C.  Spencer, 
the  Secretary  of  State  and  ex-officio  state  Superintendent  of  Com- 
mon Schools.  Mr.  Spencer  studied  the  entire  problem  and  then 
outlined  a  plan  of  education  in  New  York  City  providing  for  the 
election  of  a  Commissioner  of  Common  Schools  in  each  ward ;  for 
the  extension  of  the  general  school  laws  of  the  State  to  the  City, 
with  certain  modifications;  for  the  transfer  to  the  elected  Com- 
missioners of  "  the  schools  of  the  Public  School  Society  and  the 
schools  of  the  other  associations  and  asylums  now  receiving  the 
public  money  as  schools  under  their  general  jurisdiction,  leaving 
the  immediate  government  and  management  of  them  to  their 
respective  trustees  and  directors" ;  for  the  establishment,  by  the 
Commissioners,  of  schools  in  other  parts  of  the  city  as  district 
schools,  and  for  the  payment  of  the  public  school  money  by  the 
Chamberlain  directly  to  the  Commissioners.  The  Legislature  post- 
poned action  until  January,  1842,  and  the  school  question 
became  an  important  issue  in  the  city  campaign. 

In  his  annual  message  for  1842  Governor  Seward  gave  con- 
siderable space  to  the  school  problem  in  New  York  City,  saying 
among  other  things: 

"Happily  in  this,  as  in  other  instances,  the  evil  is  dis- 
covered to  have  had  its  origin  no  deeper  than  in  a  departure 
from  the  equality  of  general  laws.  In  our  general  system  of 
common  schools,  trustees  chosen  by  tax-paying  citizens,  levy 
taxes,  build  school-houses,  employ  and  pay  teachers,  and 
govern  schools  which  are  subject  to  visitation  by  similarly 
elected  inspectors,  who  certify  the  qualifications  of  teachers 
and  all  schools  thus  constituted  participate  in  just  propor- 
tion in  the  public  moneys,  which  are  conveyed  to  them  by 
commissioners  also  elected  by  the  people.  ...  In  the 
public  school  system  of  the  city,  one  hundred  persons  are 
trustees  and  inspectors,  and,  by  continued  consent  of  the 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  111 

Common  Council,  are  the  dispensers  of  an  annual  average 
sum  of  $35,000,  received  from  the  Common  School  Fund  of 
the  State,  and  also  of  a  sum  equal  to  $95,000,  derived  from 
an  undiscriminating  tax  upon  the  real  and  personal  estates 
of  the  City  They  build  school-houses,  chiefly  with  public 
funds  and  appoint  and  remove  teachers,  fix  their  compensa- 
tion, and  prescribe  the  moral,  intellectual,  and  religious 
instruction  which  one-eighth  of  the  rising  generation  of  the 
State  shall  be  required  to  receive.  Their  powers,  more  effec- 
tive and  far-reaching  than  are  exercised  by  the  municipality 
of  the  City,  are  net  derived  from  the  community  whose  chil- 
dren are  educated  and  whose  property  is  taxed,  nor  even 
from  the  State,  which  is  so  great  an  almoner,  and  whose 
welfare  is  so  deeply  concerned,  but  from  an  incorporated 
and  perpetual  association,  which  grants,  upon  pecuniary 
subscription,  the  privileges  even  of  life  membership,  and 
yet  holds  in  fee  simple  the  public-school  edifices,  valued  at 
eight  hundred  thousand  dollars.  Lest  there  might  be  too 
much  responsibility,  even  to  the  association,  that  body  can 
elect  only  one-half  of  the  trustees,  and  those  thus  selected 
appoint  their  fifty  associates.  The  philanthropy  and  patrio- 
tism of  the  present  managers  of  the  public  schools,  and  their 
efficiency  in  imparting  instruction,  are  cheerfully  and  grate- 
fully admitted.  'Nor  is  it  necessary  to  maintain  that  agents 
thus  selected  will  become  unfaithful,  or  that  a  system  that 
so  jealously  excludes  popular  interference  must  necessarily 
be  unequal  in  its  operation.  It  is  only  insisted  that  the  insti- 
tution, after  a  fair  and  sufficient  trial,  has  failed  to  gain 
that  broad  confidence  reposed  in  the  general  system  of  the 
State,  and  indispensable  to  every  scheme  of  universal  edu- 
cation. ...  I  submit,  therefore,  with  entire  willingness  to 
approve  whatever  adequate  remedy  you  may  propose,  the 
expediency  of  restoring  to  the  people  of  the  City  of  "New  York 
— what  I  am  sure  the  people  of  no  other  part  of  the  State 
would,  upon  any  consideration,  relinquish — the  education  of 
their  children.  For  this  purpose,  it  is  only  necessary  to  vest 
the  control  of  the  common  schools  in  a  board  to  be  composed 
of  commissioners  elected  by  the  people;  which  board  shall 
apportion  the  school  moneys  among  all  the  schools,  including 
those  now  existing,  which  shall  be  organized  and  conducted  in 
conformity  to  its  general  regulations  and  the  laws  of  the 
State,  in  the  proportion  of  the  number  of  pupils  instructed. 


112          INVESTIGATION    OF    AFFAIRS    OF    NEW    YoEK    ClTY 

It  is  not  left  doubtful  that  the  restoration,  to  the  common 
schools  of  the  City,  of  this  simple  and  equal  feature  of  the 
common  schools  of  the  State,  would  remove  every  com- 
plaint, .  .  ." 

By  chapter  150,  Laws  of  1842,  entitled  "An  act  to  extend  to  the 
City  and  county  of  New  York  the  provisions  of  the  general  act  in 
relation  to  common  schools  "  the  Legislature  established  the  tirst 
Board  of  Education  for  the  City.  The  statute  provided  that  there 
should  be  elected  in  each  ward  at  special  elections  held  in  June,, 
two  Commissioners  of  Common  Schools,  two  Inspectors  of  Com- 
mon Schools  and  five  Trustees  of  Common  Schools.  The  Com- 
missioners were  to  constitute  a  Board  of  Education.  The  Board 
had  very  little  power,  however.  Its  importance  can  be  measured 
by  the  fact  that  the  law  required  it  to  meet  at  least  once  in  three 
months.  The  real  authority  was  vested  in  the  ward  officers.  Under 
the  statute  each  ward  was  to  be  considered  as  a  town  for  the  pur- 
poses of  school  administration;  the  ward  trustees  initiated  new 
school  projects  and  these  projects,  if  approved  by  the  respective 
inspectors  and  commissioners,  became  binding  on  the  city.  The 
supervisors  cf  the  city  and  county  were  required  to  raise  annually 
by  tax  a  sum  equal  to  the  amount  of  the  State  apportionment  of 
school  moneys,  plus  a  special  tax  of  one-twentieth  of  one  per  cent 
of  the  total  assessed  valuation,  plus  such  further  amount  as  was 
necessary.  The  Board  of  Education  distributed  the  school  moneys 
among  the  wards  on  the  basis  of  average  attendance,  and  the 
ward  officers  had  charge  of  the  expenditure  of  the  funds.  The 
schools  of  the  Public  School  Society  and  those  of  other  incorpo- 
rated societies  were  continued  under  the  management  of  their 
respective  trustees.  It  was  further  provided  that  no  school  should 
receive  any  portion  of  the  school  moneys  in  which  "  any  religious 
sectarian  doctrine  or  tenet  shall  be  taught,  inculcated  or  practiced." 

This  act  proved  unsatisfactory  and  was,  therefore,  amended 
in  1843  and  1844.  By  chapter  320,  Laws  of  1844,  passed  May  7, 
1844,  the  same  school  officers  were  provided  for  as  in  the  first 
act,  but  with  a  transfer  of  powers  from  the  ward  officers  to  th& 
central  Board  of  Education.  New  school  projects  deemed  desir- 
able by  the  ward  officers  had  to  be  submitted  to  the  Board  of 
Education  for  approval  before  they  became  effective,  with  the- 
provision  that  appeals  from  the  Beard's  decision  could  be  made 
to  the  State  Superintendent  of  Common  Schools  whoee  dsterm  ina- 
tion  was  binding  for  one  year.  A  form  of  local  mprrnricn. 


HEPORT  OF  JOINT  LEGISLATIVE  COMMITTEE 

also  established  under  this  act  in  that  it  authorized  the  Board 
of  Supervisors  to  appoint  a  County  Superintendent  of  Common 
Schools  for  a  two-year  term.  The  compensation  of  this  officer 
was  fixed  at  $2.00  a  day  and  necessary  expenses.  The  schools 
established  under  the  Acts  of  1842,  1843  and  1844  were  desig- 
nated as  ward  schools. 

But  the  double  system  of  schools  and  of  public  and  private 
school  control  was  not  a  happy  one.  There  was  friction  between 
the  Board  of  Education  and  the  Public  School  Society  and  in 
1846  the  Board  questioned  the  Society's  right  to  erect  new  school- 
houses.  A  hearing  was  held  and  the  Board  decided  that  since 
the  Act  of  1844  the  Society  had  had  no  such  right.  The  Society 
appealed  to  the  Legislature  which  in  1848  passed  a  law  legalizing 
those  schools  which  the  Society  had  established  since  May  7, 
1844,  but  providing  that  it  should  establish  no  others  without  the 
consent  of  the  Board  of  Education. 

In  1851  the  Legislature  passed  an  act  (Chapter  386)  "to 
amend,  consolidate  and  reduce  to  one  act  the  various  acts  relative 
to  the  common  schools  of  the  City  of  New  York."  By  this  act 
the  powers  of  the  Board  of  Education  were  materially  enlarged; 
school  funds  were  deposited  in  the  city  treasury  and  withdrawn 
by  the  Board  as  a  whole  instead  of  being  handled  by  the  separate 
commissioners.  The  Board  was  given  authority  to  make  rules 
and  regulations  to  secure  economy  and  accountability  and  was 
authorized  to  appoint  a  City  Superintendent  of  Schools,  Assistant 
Superintendents  and  a  Superintendent  of  School  Buildings.  For 
the  past  ten  years  there  had  been  a  County  Superintendent  of 
Schools  elected  by  .the  Board  of  Supervisors,  but  he  was  not 
directly  amenable  to  the  Board  of  Education.  The  City  Superin- 
tendent was  now  empowered  to  visit  schools,  inquire  into  all  mat- 
ters pertaining  to  the  administration  thereof  and  to  advise  with 
the  trustees.  The  same  school  officers  were  continued  but  their 
terms  of  office  were  adjusted  to  a  change  made  by  an  earlier 
statute,  whereby  the  special  June  elections  were  abolished  and 
provision  made  for  the  election  of  school  officers  at  the  general 
elections.  The  school  system  was  really  established  on  a  pretty 
independent  basis  by  this  law.  One  very  significant  provision 
required  the  City  to  raise  annually  by  tax  not  only  the  equivalent 
of  the  State  apportionment  as  prescribed  by  the  general  State 
law,  and  not  only  one-twentieth  of  one  percent  on  the  assessed 
valuations  as  prescribed  by  another  special  statute,  but  also  "  such 


114          INVESTIGATION"    OF    AFFAIRS    OF    NEW    YOEK    ClTY 

additional  sums  as  the  Board  of  Education  *  *  *  shall  have 
reported  to  be  necessary.77 

In  1853  the  Legislature  ended  the  dual  control  of  the  City's 
public  schools  by  joining  the  schools  of  the  Public  School  Society 
and  those  of  the  Board  of  Education  and  providing  for  the  trans- 
fer to  the  City  of  all  the  property  of  the  Public  School  Society. 
TEe  same  law  provided  for  the  appointment  by  the  Society  from 
among  its  trustees  of  fifteen  commissioners  of  common  schools 
to  hold  office  until  January  1,  1855,  and  also  for  three  trustees 
of  common  schools  "for  each  ward  of  said  City  in  which  one  or 
more  of  the  schools  of  said  Society  ,are  now  established 77  to  serve 
until  the  first  of  January,  1855,  1856  and  1857,  respectively,  and 
for  the  merging  of  its  schools  into  the  system  of  common  schools 
established  by  law.  In  1853,  therefore,  the  Board  of  Education 
consisted  of  59  members,  two  commissioners  from  each  of  the  22 
wards  and  the  15  representatives  of  the  Public  School  Society. 
The  latter  remained  in  office  until  January  1,  1855,  when  the 
number  of  commissioners  again  became  44.  The  law  also  limited 
to  $4.00  per  pupil  the  amount  which  the  Board  of  Education 
could  require  annually  from  the  City  in  addition  to  the  equivalent 
of  the  State  apportionment  and  to  the  yield  of  the  special  tax  of 
one-twentieth  of  one  per  cent. 

Nine  years  later,  in  1864,  an  act  was  passed  establishing  seven 
school  districts  in  the  City  of  New  York  and  reducing  the  Board 
of  Education  from  44  members  elected  by  wards  to  21  members 
elected  by  districts,  each  district  to  elect  one  commissioner  of 
common  schools  each  year.  The  new  law  also  reduced  the  num- 
ber of  trustees  electe'd  in  each  ward  from  eight  to  five,  provided 
for  three  inspectors  in  each  of  the  seven  districts  to  be  named  by 
the  Mayer  subject  to  confirmation  by  the  Board  of  Education. 
The  power  of  appointing  teachers  and  janitors  was  retained  by 
the  trustees,  but  nominations  of  principals  and  vice-principals 
made  by  the  trustees  were  subject  to  approval  by  the  Board  of 
Education,  and  the  Board  was  also  given  authority  in  the  matter 
of  the  removal  of  teachers. 

A  measure  was  introduced  in  the  Legislature  of  1867  which, 
although  it  failed  of  passage,  deserves  mention  at  the  present 
juncture.  It  provided  for  the  abolition  of  the  Board  of  Educa- 
tion, the  trustees  and  the  inspectors  and  created  a  commission  of 
seven,  termed  the  Metropolitan  Board  of  Instruction,  and 
appointed  by  the  Governor  and  the  Senate.  This  was  to  be  a 
paid  board  and  its  members  were  to  hold  office  for  eight  years. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  115 

In  1869  the  Legislature  passed  an  act  providing  for  a  Board 
of  Education  of  twelve  members  who  were  to  be  appointed  by  the 
mayor  and  to  serve  until  December  31,  1871.  It  was  further 
provided  that  at  the  general  election  of  1871  twelve  Commis- 
sioners of  Common  Schools  should  be  voted  for  on  a  general  ticket, 
recognition  being  given  to  the  principle  of  minority  representa- 
tion. This  law  was  repealed  in  1870,  so  that  the  election  pro- 
vided for  was  never  held. 

The  Act  of  1870  "to  reorganize  the  local  government  of  the 
City  of  New  York  "  was  amended  in  1871  by  Chapter  574,  which 
created  a  Department  of  Public  Instruction  as  one  of  the  depart- 
ments of  the  city  government,  and  turned  over  to  it  all  the  powers 
and  duties  of  the  Board  of  Education.  The  existing  Board  was 
legislated  out  of  office  and  provision  made  for  the  appointment 
by  the  Mayor  of  twelve  commissioners  for  terms  of  five  years, 
recognition  being  given  to  the  principle  of  minority  representa- 
tion. The  Mayor  was  also  authorized  to  appoint  the  school  trus- 
tees and  inspectors.  This  law  did  away  with  the  machinery  of 
ward  and  district  representation  and  created  a  centralized  school 
system  under  the  Mayor. 

But  this  new  arrangement  did  not  last.  By  Chapter  112  of 
the  Laws  of  1873  the  seven  school  districts  set  up  by  the  law  of 
1864  were  re-established,  and  provision  was  made  for  the  appoint- 
ment by  the  Mayor  of  a  Board  of  Education  consisting  of  twenty- 
one  Commissioners  of  Common  Schools  whose  terms  were  for  three 
years.  This  Board  was  empowered  to  appoint  five  trustees  for 
each  ward  for  five  year  terms  and  the  Mayor  was  authorized  to 
appoint  twenty-one  inspectors,  three  from  each  district.  This  sys- 
tem remained  substantially  unchanged  until  1896.  Its  advan- 
tages were  said  to  be  the  removal  of  the  schools  from  political 
supervision,  the  provision  of  moderate  local  control  by  the  trus- 
tees, and  the  establishment  of  centralized  supervision  and  final 
control  by  the  Board  of  Education  without  placing  a  danger- 
ously great  authority  in  the  hands  of  the  central  Board. 

The  next  important  modification  of  the  administrative  machin- 
ery of  the  school  system  was  the  abolition  by  Chapter  387  of  the 
Laws  of  1896  of  the  ward  trustees.  These  officers  had  persisted 
since  1842  and  had  exercised  many  important  powers.  For  many 
years  they  were  elected  and,  under  the  short-lived  act  of  1871, 
they  were  appointed  by  the  mayor.  After  1873  they  were 
appointed  by  the  Board  of  Education.  The  trustees  were  often 


116       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

attacked  by  persons  interested  in  the  welfare  of  the  schools.  It 
was  claimed  that  some  of  them  were  illiterate;  that  they  were 
appointed  for  political  purposes ;  that  they  considered  the  appoint- 
ment of  teachers  as  legitimate  patronage  and  that  they  showed 
favoritism  in  promotion  and  in  the  selection  of  contractors.  A 
telling  argument  against  the  ward  trustee  system  was  that  it  was 
absurd  to  use  the  ward  as  a  basis  of  selection,  as  some  wards  had 
very  few  schools  while  other  wards  had  many.  In  1888,  in  the 
second  ward,  for  example,  there  was  only  one  school  with  but  two 
teachers,  while  in  the  twelfth  ward  there  were  499  teachers. 

The  result  of  this  agitation  was  the  passage  of  a  law  by  the 
Legislature  (Chapter  532,  Laws  of  1893)  providing  that  the 
Mayor  should  appoint  a  commission  to  report  to  the  Legislature 
a  comprehensive  revision  of  the  laws  affecting  common  schools 
and  public  education  in  the  City.  This  commission  reported  in 
1894  and  recommended  abolishing  the  inspectors  and  depriving 
the  trustees  of  all  powers  except  those  of  visiting  schools  and 
reporting  on  their  condition.  Some  of  the  trustees'  powers  were 
given  to  the  Board  of  Education  and  others  were  conferred  on  a 
Board  of  Superintendents,  to  consist  of  the  City  Superintendent 
and  twenty  Division  Superintendents.  This  Board  was  given 
large  powers.  Provision  was  also  made  for  a  Superintendent  of 
School  Buildings  and  Supplies.  The  proposed  law  failed  of  pas- 
sage at  the  1894  session.  It  was  reintroduced  in  1895  with  some 
amendments,  but  failed  again. 

Chapter  387  of  the  Laws  of  1896  abolished  the  trustees  and 
gave  the  Mayor  power  to  appoint  five  inspectors  in  each  district 
whose  duty  was  to  visit  schools.  The  statute  also  created  a  Board 
of  Superintendents,  consisting  of  the  City  Superintendent  and  as 
many  Assistant  Superintendents  as  the  Board  of  Education  might 
deem  necessary.  The  professional  control  of  the  schools  was 
lodged  almost  entirely  in  the  new  Board  of  Superintendents, 
only  a  veto  power  being  given  to  the  Board  of  Education,  whose 
composition  remained  unchanged. 

Brooklyn 

In  Brooklyn  there  was  no  "  Public  School  Society."  The 
schools  that  were  established  and  maintained  there,  after  the 
recognition  by  the  State  that  education  was  a  matter  of  public 
concern,  were  administered  by  local  authorities  subject  to  the 
general  State  laws. 


REPORT  OF  JOIXT  LEGISLATIVE  COMMITTEE  117 

As  mentioned  above,  the  State  established  the  common  school 
fund  in  1805.  The  first  distribution  was  made  in  1815,  and  in 
1816  a  local  tax  of  $2,000  was  levied  and  a  common  school 
opened  in  the  village  of  Brooklyn.  Several  other  schools  were 
established  prior  to  the  incorporation  of  the  City  of  Brooklyn  in 
1834  and  the  creation  of  a  Board  of  Education  in  1843.  But 
prior  to  1843  all  the  schools  were  organized  as  special  district 
schools.  It  is  true  that  in  1835  a  law  was  passed  (Chapter  129) 
authorizing  the  Common  Council  to  appoint  three  trustees  of  com- 
mon schools  in  each  district,  and  for  the  whole  City  three  inspec- 
tors and  three  commissioners,  but  the  district  organization  was 
still  paramount. 

The  statute  of  1843,  creating  a  Board  of  Education,  provided 
that  the  members  of  the  Common  Council  should  be  Commissioners 
of  Common  Schools  in  and  for  the  City,  and  that  on  the  first  Mon- 
day in  April,  1843,  they  should  appoint  two  or  more  persons  to 
represent  each  of  the  school  districts  as  members  of  the  Board  of 
Education.  The  full  term  of  office  was  fixed  at  three  years  and 
the  Mayor  and  Deputy  County  Superintendent  of  Common  Schools 
were  made  members  ex-officio.  The  new  Board  was  organized 
with  only  twenty-eight  appointed  members,  as  in  two  districts 
the  full  number  of  appointments  was  not  made.  The  Board  was 
authorized  in  1848  to  appoint  a  City  Superintendent  of  Common 
Schools,  the  office  of  County  Superintendent  having  been  abolished 
by  statute  in  1847. 

By  Chapter  143  of  the  Laws  of  1850  the  Board  of  Education 
was  made  to  consist  of  thirty-three  members  appointed  by  the 
Common  Council.  The  law  provided  that  at  least  one  member 
should  reside  in  each  district.  The  term  of  office  continued  to 
be  three  years.  The  law  of  1854  annexing  the  City  of  Williams- 
burg  and  the  town  of  Bushwick  to  Brooklyn  required  the  Com- 
mon Council  to  appoint  additional  members  of  the  Board  of 
Education  for  the  new  part  of  the  City,  and  that  body  fixed  the 
membership  at  forty-five,  of  whom  thirteen  were  to  be  residents 
of  the  new  territory.  This  number  remained  unchanged  through- 
out the  rest  of  the  Board's  existence.  In -1862  the  Mayor  was 
given  authority  to  nominate  members  of  the  Board  of  Education, 
subject  to  confirmation  by  the  Common  Council. 

In  1873  the  charter  was  amended  by  providing  that  there  should 
be  a  Department  of  Public  Instruction  in  Brooklyn  under  the  con- 
trol of  the  Board  of  Education ;  that  the  City  Superintendent  of 


118       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

Schools  should  be  called  the  Superintendent  of  Public  Instruc- 
tion; that  his  term  should  be  increased  from  one  to  three  years 
and  that  the  Board  of  Education  might  appoint  two  Associate 
Superintendents  for  three-year  terms. 

The  amended  charter  which  was  passed  May  25,  1880,  pro- 
vided that  any  vacancy  in  the  Board  of  Education  occurring  dur- 
ing the  remainder  of  1880  should  be  filled  by  the  Mayor  and 
Comptroller  (an  act  passed  June  16,  1880,  provided  that  in  case 
the  Mayor  and  Comptroller  failed  to  agree,  the  Auditor  of  the 
City  should  become  one  of  the  appointing  powers),  and  any 
vacancy  during  1881  should  be  filled  by  the  Mayor  alone.  After 
January  1,  1882,  the  sole  power  of  appointment  was  with  the 
Mayor.  Some  confusion  resulted  in  1886  from  the  fact  that  the 
amended  charter  fixed  two-year  terms  for  the  heads  of  all  city 
departments  without  specifically  mentioning  the  Board  of  Educa- 
tion whose  members  had  been  serving  three-year  terms.  In  1882 
Mayor  Low  acted  on  the  assumption  that  the  Legislature  had  not 
intended  to  change  the  term  of  office  of  Board  members  and  made 
regular  three-year  appointments.  His  successor,  in  1886,  took 
the  other  view,  declared  vacancies  and  made  appointments  on  the 
two-year  theory  and  doubt  was  cast  on  the  legality  of  some  of  the 
Board's  acts.  In  1887  the  Legislature  settled  the  matter  by  spe- 
cifically extending  the  terms  of  the  1885  and  1886  appointees 
and  establishing  the  three-year  term. 

One  unique  feature  of  the  Brooklyn  public  school  system  can- 
not be  left  untouched  upon.  The  by-laws  of  the  Board  of  Educa- 
tion of  1843  provided  for  district  committees  consisting  cf  the 
Board  members  for  each  district.  The  schools  of  the  district  were 
especially  committed  to  these  committees.  This  scheme  lasted  but 
a  short  time,  being  followed  by  the  local  school  committee,  pro- 
vided for  by  an  amendment  to  the  by-laws  made  soon  after  the 
reorganization  necessitated  by  the  statute  of  1850.  These  local 
school  committees  consisted  of  three  members  for  each  school .  In 
the  course  of  time  these  committees  acquired  large  powers  in  the 
appointment  and  promotion  of  teachers,  in  the  making  of  repairs, 
etc.,  until  they  were  practically  supreme  in  their  respective  schools. 
This  system  was  continued  until  the  abclition  of  the  Brooklyn 
school  board  in  1902  and  was  even  then  carried  over  as  Section 
1103  of  the  first  Greater  "New  York  charter.  The  abuses  of  the 
local  committee  system,  particularly  with  respect  to  the  appoint- 
ment and  promotion  of  teachers,  were  repeatedly  the  subject  of 
criticism. 


REPOBT  OF  JOINT  LEGISLATIVE  COMMITTEE  119 

Queens  and  Richmond. 

The  Borough  of  Queens  is  composed  of  several  formerly  inde- 
pendent communities,  such  as  JTewtown,  Flushing  and  Jamaica. 
The  early  history  of  education  is  the  history  of  these  separate 
towns.  The  towns  became  school  districts  under  the  general  State 
law,  the  subdivision  in  Newtown  taking  place  in  1814,  and  schools 
were  established  from  time  to  time.  In  1870  a  portion  of  New- 
town  was  incorporated  as  Long  Island  City  and  the  schools  were 
placed  under  the  city  government  in  charge  of  a  Board  of  Educa- 
tion of  five  members  appointed  by  the  Mayor.  The  village  of 
Flushing  was  incorporated  in  1837.  In  1848  it  was  provided  with 
a  Board  of  Education  of  five  members  elected  by  the  people. 

In  neither  Queens  nor  Richmond,  however,  was  there  any 
central  organization  in  charge  of  the  public  schools.  There  were 
numerous  school  districts  and  district  officers,  but  not  until  the 
incorporation  of  these  two  boroughs  into  the  Greater  City  was 
there  anything  that  resembled  centralized  local  school  authority. 


FOURTH  REPORT 


REPORT  ON  THE  FINANCES  OF  THE  CITY  OF 
NEW  YORK 


March,  1922 


[121] 


REPORT  OF  THE    FINANCES   OF    THE    CITY  OF  NEW 
YORK,  MARCH,  1922 


To  the  Legislature  and  to  the  Charter  Revision  Commission: 

The  city  lias  run  in  debt  approximately  a  hundred  thousand 
dollars  a  day  since  the  greater  city  was  incorporated.  The  funded 
debt  has  fluctuated  around  the  constitutional  debt  limit  for  ten 
years.  The  tax  rate  has  risen  until  it  has  reached,  if  not  passed, 
the  constitutional  tax  limit.  All  other  means  of  raising  funds 
to  meet  the  ever  rising  tide  of  expenditures  having  been  exhausted, 
resort  has  been  had  to  various  devices,  including  doubtful  in- 
terpretations of  constitutional  limitations  not  contemplated  at 
their  enactment,  to  statutory  relief  unsound  in  principle  if  not 
unconstitutional  like  the  general  fund  bond  legislation,  to  increas- 
ing and  making  permanent  the  floating  debt  which  in  the  eye 
of  the  law  was  intended  to  be  small  and  temporary,  and  to  the 
use  for  current  expenses  of  the  income  of  public  utilities  allocated 
in  law  and  equitably  applicable  to  the  payment  of  the  principal 
and  interest  of  bonded  indebtedness  incurred  in  the  construction 
of  such  utilities.  These  devices  proving  inadequate,  the  power 
of  assessment  has  been  resorted  to  by  the  city  administration, 
which  controls  the  department  of  taxes  and  assessments,  until  the 
assessment  has  reached  approximately  94  per  cent  of  the  actual 
value,  a  rate  much  higher  than  the  rest  of  the  State.  Like  the 
other  devices  pursued,  this  is  nearly  exhausted. 

The  net  debt  of  the  city  as  of  December  31,  1921,  was  $1,224,- 
475,347.51,  of  which  $1^110,795,697.51  was  funded  and  $113,- 
679.050  floating  debt  represented  by  revenue  bonds,  special 
revenue  bonds  and  tax  notes.  The  total  net  debt  as  of  Decem- 
ber 31,  1911,  was  $809,353,129.29,  of  which  $756,711,343.05 
was  funded  and  $52,641,786.24  floating  debt.  The  present  debt 
amounts  to  $217.64  per  capita  of  the  population.  Exhibit  "A," 
hereto  attached,  is  a  statement  of  the  net  funded  debt  since  1898. 
The  budget  for  1921  was  $345,530,039.77  and  for  1911, 
$173.967,835.16. 

The  budget  for  1921  is  made  up  of: 

Cost  of  administration $217,960,329  20 

Debt  service 105,528,527  30 

State  taxes   22,041,183  27 

[123] 


124       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

The  budget  for  1911  was  made  up  of: 

Cost  of  administration $123,306,013   IT 

Debt  service 50,661,821  99 

State  taxes   .  None. 


Tables  showing  the  budgets,  cost  of  administration,  debt  service, 
State  taxes  and  tax  levies  since  1898  are  hereto  attached  marked 
respectively  Exhibits  "  B  "  and  "  C." 

The  difference  between  budget  and  levy  for  the  same  year  arises 
from  the  annual  revenue  from  income  paying  properties  like 
the  docks,  ferries,  water  system,  and  taxes  received  from  the 
State,  constituting  the  general  fund.  These  receipts  amounted 
to  $63,216,718.87  in  1921,  and  to  $32,154,342.95  in  1911. 

The  assessment  for  real  property  in  1921  was  $9,972,985,104, 
personal  $213,422,175,  a  total  of  $10,186,207,279.  The  assess- 
ment for  real  property  in  1911  was  $7,858,840,164,  personal 
$357,923,123,  a  total  of  $8,216,763,287.  While  the  cost  of 
government  in  this  period  has  increased  81  per  cent,  the  assess- 
ment has  increased  only  24  per  cent.  A  table  showing  the  assess- 
ments since  1898  is  hereto  attached,  marked  Exhibit  UD." 

The  real  estate  tax  rate  for  1921  (Manhattan)  was  2.77  and 
for  1911,  1.72248,  for  Brooklyn,  1921,  2.80,  and  1911,  1.75502. 
For  other  years  see  World  Almanac,  1922,  page  557. 

A  table  showing  the  per  capita  cost  of  government  during  suc- 
cessive city  administrations  is  hereto  annexed  and  marked 
Exhibit  "E." 

ABUSES  IN  FINANCIAL  MANAGEMENT 

Floating  or  Short  Term-  Debt. —  The  average  monthly  balances 
for  the  first  half  of  the  year  1921  shows  the  short  term  or  floating 
debt  of  the  city  as  follows : 

Kevenue  bonds $103,549,833  33 

Special  revenue  bonds 27,150.066  67 

Tax  notes 4,628,902  53 

Corporate  stock  notes 109,584,442  73 


$244,913,245  26 

After  deducting  from  this  debt  such  of  these  securities  as  are 
held  in   the   sinking  funds,   there  was   an   outstanding  average 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  125 

balance  of  $201,191,900.     Carrying  this  debt  as  a  floating  debt 
is  the  source  of  great  loss  to  the  city. 

Revenue  bonds  are  issued  in  anticipation  of  the  payment  of 
taxes  during  the  year  in  which  they  are  issued,  and  to  be  paid  out 
of  such  taxes.  -Special  revenue  bonds  are  issued  in  anticipation 
of  an  appropriation  in  the  budget  of  the  year  following  their 
issue.  Tax  notes  are  issued  to  pay  for  public  improvements  to 
be  redeemed  by  taxes  in  the  tax  levy  or  levies  of  the  year  or  years 
next  following  the  adoption  of  the  budget  or  budgets  in  which 
the  expenditure  is  authorized.  Corporate  stock  notes  are  issued 
in  anticipation  of  the  sale  of  bonds,  with  the  proceeds  of  which 
they  are  to  be  paid,  and  are  part  of  the  funded  debt. 

(a)   Revenue  Bonds 

The  taxes  in  each  calendar  year  are  allocated  to  the  year  in 
which  they  are  levied.  Such  taxes  are  payable  in  the  months  of 
May  and  November.  The  city  borrows  money  for  its  expenses 
from  January  first  until  taxes  are  paid  in  May  by  issuing 
revenue  bonds,  payable  out  of  the  year's  taxes.  As  the  city  re- 
quires more  each  year  for  expenses  than  taxes  levied,  and  there 
are  delinquent  taxes  not  paid  during  the  year  in  which  they  are 
levied,  payment  of  the  bonds  is  delayed.  They  are  in  fact, 
though  not  in  form,  renewed  from  time  to  time  to  carry  back 
taxes.  The  total  arrears  of  taxes  for  the  year  1921  was  $56,854,- 
113.14,  and  the  whole  amount  of  back  taxes  as  of  December  31, 
1921,  was  $113,142,538.63.  A  statement  of  back  taxes  is  hereto 
attached,  marked  Exhibit  "  F." 

The  revenue  bonds  outstanding  December  31,  1921,  amounted 
to  $78,077,000.  These  were  increased  by  new  issues  commencing 
January  1st  to  meet  the  cost  of  administration  until  taxes  are 
paid  in  May.  A  statement  of  revenue  bonds  outstanding  to 
June,  1921,  will  be  found  in  Exhibit  "G,"  hereto  attached. 


(&)   Special  Revenue  Bonds 

In  1909  the  Constitution  was  amended  to  permit  the  city  of 
New  York  to  issue  "bonds  to  be  redeemed  out  of  the  tax  levy 
for  the  year  next  succeeding  the  year  of  their  issue,  provided  that 
the  amount  of  such  bonds  which  may  be  issued  in  any  one  year 
in  excess  of  the  limitations  herein  contained  shall  not  exceed  one- 
tenth  of  one  per  centum  of  the  assessed  valuation."  It  was  un- 
doubtedly anticipated  at  the  time  this  provision  was  adopted  that 


126       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

the  limitation  of  one-tenth  of  one  per  centum  would  be  an  abso- 
lute limitation,  but  an  examination  of  the  context  makes  it  doubt- 
ful whether  this  limitation  takes  effect  before  the  city  reaches 
or  passes  the  debt  limit.  Special  revenue  bonds  have  been  issued 
in  much  larger  amounts  than  one-tenth  of  one  per  ecnt,  and  the 
practice  has  been  sanctioned  by  legislative  enactment.  The 
amount  outstanding  December  31,  1921,  was  $30,602,650,  or  more 
than  three  times  the  amount  named  in  the  constitution.  A  state- 
ment of  such  bonds  outstanding  since  1917  is  contained  in 
Exhibit  "G." 

'Special  revenue  bonds  are  intended  to  meet  contingencies  not 
anticipated  when  the  budget  is  made  up,  but  have  been  issued  for 
any  and  everything  as  a  means  of  increasing  revenue  for  the  cur- 
rent year,  to  be  paid  out  of  taxes  of  the  following  year.  In  1920 
the  city  having  all  but  reached  the  tax  limit,  authorized  special 
revenue  bonds,  to  the  amount  of  $37,735,181.35,  to  meet  expenses. 
A  statement  of  such  authorizations  is  contained  in  Exhibit  "  H," 
hereto  attached.  The  multiplicity  of  the  authorizations  forbids 
a  full  statement  in  detail,  but  as  illustrative  of  the  multitude  of 
abuses  under  this  provision,  the  following  items  are  given  from 
these  authorizations:  "A  tablet  to  the  donor  of  Hero  Park  — 
$450."  "  Coal  for  municipal  ferries,  $244,472.50."  "  Premiums 
on  bonds  of  municipal  officers,  $12,560.98." 

(c)   Tax  Notes 

Tax  notes  now  constitute  a  minor  item  of  the  floating  debt. 
Five  millions  are  outstanding. 

The  volume  of  business  transacted  by  the  city  in  carrying 
$135,000,000  of  revenue  bonds,  special  revenue  bonds  and  tax 
notes  is  by  no  means  represented  by  the  amount  outstanding  at  any 
date.  These  securities,  like  the  corporate  stock  notes,  exceeding  in 
amount  one  hundred  million  dollars,  are  issued  and  reissued  at 
short  periods,  after  the  fashion  of  commercial  paper.  The  total 
issue  for  1921,  including  renewals  or  new  issues  to  take  up  old 
issues,  are  for: 

Revenue  bonds $369,000.083 

Special  revenue  bonds 30,602.650 

Tax  notes   .  5,000,000 


$404,603.633 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  127 

The  issue  and  reissue  of  corporate  stock  notes  amounted  to 
$230,185,500. 

Such  a  course  of  municipal  business  is  carried  on  at  great  cost, 
owing  to  the  high  rate  of  interest  on  short  term  paper  and  the 
expense  incident  to  so  many  transactions.  The  city  is  always 
an  applicant  at  the  banks  for  millions  of  dollars  on  short  loans. 
As  the  debt  is  never  redeemed,  but  met  by  the  issue  of  new  paper, 
"  temporary  "  is  a  misnomer.  It  is  as  "  permanent  "  as  any  part 
of  the  debt,  but  not  a  limitation  to  incurring  further  debt. 

While  the  corporate  stock  notes  are  less  subject  to  criticism 
because  issued  as  a  part  of  the  funded  debt  with  a  view  to  con- 
verting them  into  bonds,  they  swell  the  floating  debt  and  add  to 
its  perils.  The  legislative  committee  of  1915,  investigating  the 
finances  of  the  City  of  New  York,  reported  (1916)  in  relation  to 
this  feature  of  its  finances: 

"  Great  embarrassment  and  loss  in  the  City's  finances  have 
arisen  from  the  custom  of  keeping  a  large  amount  of  short 
time  commercial  paper  on  the  market.  In  August,  1914, 
the  City  had  outstanding  of  such  paper  $25,000,000  in  cor- 
porate stock  notes,  issued  in  anticipation  of  bond  issues,  and 
$73,000,000  of  short  time  paper  chargeable  to  current 
revenues  issued  in  anticipation  of  taxes.  Of  this  paper 
$77,000,000  was  held  in  Europe.  The  crisis  resulting 
from  the  war  compelled  the  City  to  borrow  of  the  New  York 
banks  $100,000,000  to  meet  this  paper  and  current  expenses 
and  to  charge  off  a  loss  of  more  than  $4,000,000  in  expenses, 
commissions  and  interest.  The  City  was  caught  in  the  same 
way  in  1907  and  the  City  administration  in  each  case 
regarded  itself  as  fortunate  in  escaping  a  worse  predicament 
from  a  default  on  the  City's  commercial  paper. 

"  The  issuing  of  short-term  paper  in  anticipation  of  taxes 
is  unavoidable  under  the  present  system  of  collecting  taxes 
for  each  calendar  (fiscal)  year  in  May  and  November.  The 
City  always  spends  borrowed  money  for  its  current  expenses. 
Such  issues  could  be  avoided  if  taxes  were  collected  in  Jan- 
uary and  July.  The  Committee  favors  making  this  change. 
To  avoid  the  shock  that  would  otherwise  be  felt  by  real  estate, 
it  should  be  provided  that  taxpayers  may  in  1917  have  until 
April  30,  instead  of  May  31,  in  which  to  pay  taxes,  and  a 
sliding  scale  adopted  for  three  years,  so  that  January  31 


128       INVESTIGATION  OF  AFFAIRS  OF  NEW  YOEK  CITY 

and  July  31  will  be  the  last  days  for  the  payment  of  taxes 
in  1920. 

''  The  annual  interest  charge  for  these  loans  has  averaged 
three  and  a  half  million  dollars.  The  total  amount  paid  in 
the  last  ten  years  is  $o(j,470,837,  or  substantially  $5,000,000 
more  than  the  City  has  paid  during  the  same  period  in  direct 
State  taxes.  To  this  amount,  lost  to  the  City  through  a 
system  of  discounting  substantially  all  of  the  taxes  before 
they  reach  the  City  treasury,  must  be  added  the  $4,000,000 
lost  on  the  hundred  million  loan  in  1914,  and  upwards  of 
$1,000,000  lost  in  1907." 

The  conditions  condemned  in  this  passage  of  the  report  of  1916 
without  a  single  dissent,  involving  an  annual  loss  of  three  and  a 
half  million  dollars  have  continued  until  the  loss  is  now  five  and 
a  half  million  dollars. 

The  city  comptroller  testified  that  the  city  is  thrown  into  the 
short  term  money  market  for  $142,000,000  twice  a  year  by  reason 
of  the  failure  to  advance  the  tax  date,  and  that  it  is  safe  to  take 
as  a  round  figure  $150,000,000  for  short-term  loans  on  this 
account. 

A  bill  to  advance  the  tax  dates  from  May  and  November  to 
January  and  July  was  passed  by  the  Legislature  in  1916,  but 
vetoed  by  the  mayor  because  of  a  technical  defect,  with  a  state- 
ment of  approval  of  the  principle  of  the  bill,  and  in  expectation 
that  it  would  become  a  law  in  1917.  War  conditions  prevented 
the  enactment  of  the  law,  which  should  not  now  be  further 
deferred.  The  comptroller  sought  this  legislative  relief  in  1921, 
and  testified  that  he  informed  the  Legislature,  "  that  the  respon- 
sibility for  a  financial  crisis  would  be  upon  them  if  they  did  not 
pass  the  tax  date  bill,  because  the  failure  to  pass  that  bill  results 
in  outstanding  obligations  at  a  sum  far  in  excess  of  what  the 
money  market  is  in  condition  to  stand  in  normal  times." 

Sinking  Funds. —  There  are  eight  sinking  funds,  of  which  five 
were  inherited  from  municipalities  incorporated  in  the  present 
city,  and  relate  only  to  indebtedness  which  they  were  created  to 
protect.  These  sinking  funds  are  as  follows: 

Sinking  fund  for  the  payment  of  interest  on  the  (old)  city  debt. 

Sinking  fund  for  the  redemption  of  the  (old)  city  debt  No.  1. 

Sinking  fund  of  the  City  of  Brooklyn. 

Water  sinking  fund  of  the  City  of  Brooklyn. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  129 

Sinking  fund  of  Long  Island  City  for  the  redemption  of  fire 
Jbonds. 

Sinking  funds  have  been  established  and  maintained  by  the 
present  city  as  follows : 

Sinking  fund  of  the  City  of  New  York. 

Rapid  Transit  sinking  fund  of  the  City  of  .New  York. 

Water  sinking  fund  of  the  City  of  New  York. 

The  total  amount  reported  as  held  by  these  funds  on  Decem- 
ber 31,  1921,  was  $603,590,922.  The  transactions  of  the  funds, 
which  are  substantially  duplicated  each  year,  will  be  referred  to 
the  year  preceding  this  inquiry,  1920.  Substantially  all  of  the 
holdings  of  the  sinking  funds  consist  of  obligations  of  the  city. 
As  principal  and  interest  fall  due,  it  is  paid  into  the  funds  and 
they  are  increased  from  year  to  year.  They  are  also  increased 
from  year  to  year  by  the  amount  paid  in  for  amortization.  Assets 
of  the  sinking  funds  are  always  deducted  in  .statements  of  the 
city  debt. 

The  sinking  funds  of  the  old  municipalities  stand  in  marked 
contrast  to  the  sinking  funds  of  the  present  city.  They  were 
secured  by  pledging  revenues  to  debts  incurred.  These  revenues 
have  not  only  proved  adequate,  but  have  produced  large  surpluses 
which  inure  to  the  benefit  of  the  present  city. 

The  sinking  fund  for  the  payment  of  the  interest  on  the  (old) 
city  debt  is  chargeable  $476,372.08  annually  for  interest  on  out- 
standing bonds  while  its  cash  receipts  from  interest  on  its  invest- 
ments, Croton  water  rents,  ferries  and  other  pledged  revenues, 
is  approximately  $14,000,000.  The  sinking  fund  for  the  pay- 
ment of  (old)  city  debt  Xo.  1,  charged  with  the  payment  of 
$35,832,891.79  in  bonds  falling  due  in  1929,  receives  from  its 
securities  now  amounting  to  $35,000,000  (besides  $376,500,000 
general  fund  bonds),  and  from  dock  rents  and  other  pledged 
revenues  more  than  nine  million  dollars  annually. 

These  huge  surpluses  have  not  been  overlooked  by  the  city 
government. 

General  Fund  Bonds. —  In  1903,  section  222  of  the  charter 
was  enacted,  under  which  the  sinking  fund  commission  deter- 
mines the  amount  of  the  surplus  in  each  of  these  funds,  and 
directs  its  transfer  to  the  city  treasurer  for  expenses  of  adminis- 
tration, and  in  reduction  of  the  tax  rate.  This  section  provides 
for  the  issue  of  general  fund  bonds  'by  the  city,  to  be  deposited  in 
5 


130       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

place  of  the  surplus  removed,  and  for  the  cancellation  of  such 
bonds  as  soon  as  the  old  city  debt  is  paid.  Such  bonds  are  in 
fact  no  more  than  receipts  by  the  city  for  the  money  withdrawn. 
Three  hundred  seventy-six  million  and  five  hundred  thousand 
dollars  of  the  general  fund  bonds  have  been  issued  since  1903. 
They  are  reported  as  a  part  of  the  sinking  fund  holdings,  but 
as  a  matter  of  bookkeeping  only.  Deducting  these  bonds  from 
the  whole  amount  of  such  holdings,  the  sinking  fund  contains  only 
$227,090,922,  instead  of  $603,590,922,  the  apparent  total.  The 
funds  actually  transferred  to  the  city  treasurer  under  this  pro- 
vision to  date  amount  to  $296,661,385.81  and  the  funds  so  trans- 
ferred for  each  year  are  as  follows : 

1903 $8,462,583  33 

1904 9,216,437  50 

1905 10,423,625  01 

1906 10,886,958  33 

1907 12,297,087  50 

1908 ' 12,704,416  66 

1909 14,943,083  33 

1910 14,367,812  50 

1911 14,359,916  66 

1912 13,885,875  00 

1913  . 17,811,629  56 

1914 18,744,589  04 

1915 17,563,445  21 

1916 V.  17,306,232  88 

1917 18,004,678  08 

1918 19,321,109  59 

1919 20,085,308  22 

1920 23,000,574  96 

1921 23,276,022  45 


Total $296,661,385  81 


The  surplus  increase  each  year  with  the  increase  in  receipts 
from  pledged  revenues,  among  which  are  water,  docks  and  ferries. 
The  discrepancy  between  the  sums  annually  transferred  to  the 
city  treasury  and  the  annual  issue  of  general  fund  bonds  arises 
from  the  issue  of  bonds  to  cover  interest  on  the  general  fund  bonds 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  131 

previously  issued,  and  is  likewise  only  a  matter  of  bookkeeping. 
The  comptroller's  testimony  on  these  transactions  follows: 

"  The  surplus  moneys  in  the  Sinking  Fund  ^To.  1  of  the 
old  City  of  Xew  York  have  been  taken  out  under  the  act  of 
the  legislature  passed  in  that  year  and  held  and  applied  to 
the  reduction  of  taxation,  and  altogether,  up  to  the  present 
time,  more  than  $350,000,000  of  moneys  pledged  to  the  pay- 
ment of  the  City's  debt  has  in  that  way  been  applied  to 
reduce  current  taxes,  and  general  fund  bonds  substituted, 
and  that  is  merely  a  memorandum  showing  the  total  amount 
that  the  sinking  funds  have  been  depleted  by  applying  their 
cash  to  current  expenses. 

"  I  may  add  that  that  money  could  be  better  applied  in 
reducing  the  City's  debt. 

"  I  think  it  is  beating  the  devil  around  the  bush,  that  is 
what  I  think  about  it. 

"  The  act  of  1903,  although  no  one  from  1903  to  1921 
has  challenged  its  constitutionality,  is  an  utterly  indefensible 
bit  of  legislation. 

"  My  present  judgment  is  that  it  is  entirely  irregular 
and  unsound  to  take  the  revenue  received  from  self-sustain- 
ing properties  for  which  debt  has  been  incurred  and  apply 
those  revenues  for  any  other  purposes  than  to  the  payment 
of  the  interest  and  the  amortization  of  that  debt,  except 
where  there  may  be  a  surplus  so  great  that  you  can  never 
have  any  possible  use  for  it,  and  then  I  think  you  could  very 
well  apply  it  to  the  interest  and  amortization  of  some  other 
debt  that  is  not  self-sustaining. 

"  There  is  a  gross  diversion  of  them  from  their  proper 
application.  Revenues  from  docks,  or  the  revenues  from 
water,  or.  for  that  matter,  from  any  other  self-sustaining 
enterprise,  rapid  transit,  so  far  as  it  is  self-sustaining,  should 
be  applied  to  the  payment  of  interest  and  to  provide  for  the 
redemption  of  the  bonds  that  have  been  issued  to  provide 
those  several  public  improvements.  They  should  not  be 
diverted  to  reduce  taxation  and  then  throw  this  other  burden 
of  redemption  and  interest  into  the  budget  over  and  above 
the  tax  limit." 

The  practice  thus  established  of  diverting  sinking  fund  assets, 
in  their  nature  applicable  to  specific  debts,  to  ordinary  city 
expenses  has  proved  so  convenient  to  successive  administrations 


132       INVESTIGATION  OF  AFFAIRS  OF  NEW  YOEK  CITY 

that  they  have  turned  into  these  sinking  funds  receipts  from 
docks,  ferries  and  water,  which  were  not  pledged  to  the  funds, 
thereby  facilitating  and  covering  the  misapplication. 

'Substantially  all  cash  accumulating  in  the  sinking  funds  is 
absorbed  annually  by  purchasing  new  issues  of  city  securities. 
Thirty  million  dollars  was  so  absorbed  in  1920. 

The  results  of  sinking  fund  management  may  be  summarized 
as  follows: 

(a)  The  sinking  funds  furnish  no  security  for  the  debt  held 
by  the  public.     That  debt  must  be  paid  by  taxation.     The  sinking 
fund  securities  could  be  disposed  of,  if  a  market  could  be  found, 
and  the  proceeds  applied,  but  that  has  been  discounted  by  treating 
such  securities  as  cancelled  in  computing  the  city  debt,  and  when 
disposed  of  to  the  public,  such  securities  would  have  to  be  met 
by  taxation. 

(b)  Taxes  have  been  increased  by  taking  funds  which  should 
be  applied  to  keep  down  debt  service,  for  expenses  of  administra- 
tion, this  in  effect  increasing  to  that  extent  the  2  per  cent  con- 
stitutional tax  limitation  and  by  adding  instead  of  deducting  the 
amount  of  such  funds  to  debt  service  which  has  no  constitutional 
limitation.      In  this  way  $9,471,722.74  of  Croton  water  rents, 
$1,633,677.56   from  the   ferries   and   $6,974,093.31   from   dock 
leases,  besides  lesser  revenues  derived  from  permanent  utilities 
diverted  from  application  to  the  funded  debt,  were  applied  to 
the  cost  of  administration  in  1920.      In  the  same  year  there  was 
included  in  the  budget  for  debt  service  for  the  water  supply, 
$8,619,289.17;  for  docks  and  municipal  ferries,  $3,940,402,40. 
The  issue  of  corporate  stock  and  bonds  for  water  supply  in  the 
same  year  amounted  to  $3,120,100.      The  practice  is  indefensible 
and  the  reverse  of  the  practice  in  relation  to  the  old  subways, 
where   the   receipts   are   directly   applicable   to   the  payment   of 
amortization  and  interest ;  to  the  Brooklyn  water  system,  where 
the  receipts  go  to  pay  the  debt ;  and  to  bridges,  where  the  receipts 
are  applied  to  the  expenditures  on  bridges. 

The  taxes  levied  having  passed  the  constitutional  limit  in  1921, 
such  transfers  operated  to  further  increase  prohibited  taxes  in 
the  amounts  so  transferred,  and  in  the  same  way  to  keep  barely 
within  the  limit  in  19'20.  The  practice  is  condemned  by  the 
present  comptroller,  who  testified  that  in  practical  effect  it 
expanded  the  tax  limit. 

Nothing  could  be  more  complicated  and  confusing  than  the 
sinking  fund  system  established  under  the  title  of  the  sinking 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  133 

fund  of  the  city  transit  sinking  fund  and  the  water  sinking  fund 
and  provides  for  each  funded  debt  allocated  on  paper  to  its  own 
amortization.  While  the  funds  are  indiscriminately  mixed,  sink- 
ing funds,  if  maintained  at  all,  should  be  separately  maintained. 
Such  was  manifestly  the  purpose  of  the  constitutional  amend- 
ment of  1909,  as  applied  to  the  $69,000,000  of  dock  bonds 
exempted  under  its  provisions,  but  no  separate  sinking  fund  has 
ever  been  provided.  If  the  present  system  of  sinking  funds  had 
been  organized  with  a  view  to  concealing  their  purpose  and  effect, 
the  inquiring  citizen  could  not  have  been  rendered  more  helpless. 

A  sinking  fund  is  defined  as  "  a  fund  created  by  gradual 
accumulations  for  sinking  or  paying  a  debt,  or  providing  against 
contingencies."  These  sinking  funds  answer  neither  purpose 
of  the  definition.  On  the  contrary,  they  promote  the  increase 
of  debt  and  extravagance,  involve  a  multitude  of  costly  trans- 
actions without  profit,  stimulate  a  false  sense  of  security  and 
confuse  the  public  as  to  the  city's  real  financial  condition.  This 
is  in  marked  contrast  to  the  operation  of  the  sinking  funds  of  the 
municipalities  out  of  which  the  city  was  formed.  These  were 
adequately  secured,  have  safely  provided  for  the  bonded  debts 
charged  against  them,  and  have  furnished  huge  surpluses  for 
manipulation  by  succeeding  administrations  of  the  greater  city 
in  violation  of  every  sound  principle  of  finance.  The  sinking 
fund  commission,  as  the  responsible  director  of  these  funds,  is 
worse  than  useless  and  should  be  abolished. 

A  statement  showing  the  transactions  of  the  sinking  funds, 
with  their  interlocking  and  interweaving  hodge  podge  of  revenues, 
internal  investments,  contributions,  redemptions,  interest  pay- 
ments and  transfers,  is  hereto  annexed  and  marked  Exhibit  "  I." 

Refunding  City  Debt. —  The  funded  debt  of  the  city  has  been 
issued  without  system  and  matures  so  irregularly  as  to  invite 
future  peril  to  the  city's  credit.  Of  the  $914,441,*412.68  falling 
due  from  1922  to  1967,  only  $22,000,000  falls  due  before  19-28. 
None  falls  due  in  the  years  "l931,  1938,  1939,  1943,  1944,  1945, 
1946,  1947.  Seven  hundred  and  eighty-one  million  dollars  falls 
due  after  1951,  and  $109,000,000  in  the  year  1960. 

This  unscientific  arrangement  is  expensive  as  it  is  inexpedient, 
and  the  investigations  of  the  Committee  indicate  that  by  making 
provision  for  the  payment  of  the  debt  in  equal  annual  install- 
ments for  amortization  and  interest,  a  saving  of  approximately 
$178,000,000  can  be  made  by  1967,  the  last  date  of  maturity. 
The  payments  as  they  fall  due  with  compound  interest  have  been 


134:       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

computed  and  compared  with  the  equal  annual  payments  on  the 
basis  of  5  per  cent  as  an  average  return  on  the  funds  held  for 
application  to  future  debt.  The  plan  for  redemption  is  set  forth 
in  the  report  of  the  Committee's  actuaries,  Messrs.  Ferine  & 
Nichols,  marked  Exhibit  "  J,"  hereto  attached.  If  criticism  foe 
made  that  assurance  is  lacking  of  the  annual  return  of  5  per 
cent  on  such  funds,  on  the  ground  that  it  may  be  too  high,  nothing 
more  serious  would  in  such  event  occur  than  a  partial  loss  of  the 
profit  indicated.  This  would  not  be  important  for  a  number  of 
years,  as  the  interest  and  bonds  falling  due  will  substantially 
absorb  the  payments.  As  the  funded  debt  is  issued  at  a  low  rate 
of  interest,  such  funds  would  be  reasonably  sure  to  draw  a  higher 
rate  of  interest  than  the  debt  they  are  kept  to  redeem.  If  the 
plan  be  adopted,  a  sinking  fund  should  be  established  and  invested 
in  other  obligations  than  of  the  City  of  New  York.  The  State  has 
always  found  such  a  course  wise  and  profitable. 

The  payments  by  the  city  under  this  plan  would  be  less  than 
the  amounts  now  currently  paid  for  amortization  and  interest,  and 
would  continue  to  be  less  until  1930.  No  embarrassment  can 
arise  from  the  obligation  to  maintain  existing  sinking  funds  for 
parts  of  the  funded  debt.  It  can  be  arranged  by  consolidation  or 
transfer,  or  if  necessary,  payments  to  existing  sinking  funds  can 
be  treated  as  partial  payments  to  the  new  sinking  fund  until  the 
time  arrives  when  the  old  funds  go  out  of  existence. 

Future  debts  can  be  provided  for  in  the  same  way  by  providing 
for  periodical  funding  in  the  same  manner  with  like  security. 

Loss  FROM  MUNICIPAL  OWNERSHIP 

The  city  suffers  great  loss  by  reason  of  its  investment  in  prop- 
erty which  falls  under  the  classification  of  municipal  ownership. 
A.  Docks. —  As  appears  by  this  Committee's  report  on  the 
dock  department,  the  city  owns  dock  property  worth  $300, 000, 000. 
This  property  serves  State  and  National  purposes  even  more  than 
municipal,  and  could,  as  appears  from  payments  for  dock  service 
by  lessees,  readily  give  a  net  return  of  6  per  cent,  or  $18,000,000. 
But  the  financial  statement  of  the  docks  is: 

Total  receipts $7,094,240 

Cost  of  administration «1 ,202, 427 

Two  per  cent  depreciation  on  pstim^ted  value  of  dock 

construction  Jan.  1,  1920  ($70,000,000) 1 ,400,000 

Loss  of  taxes  on  dock  property  not  used  bv  the  citv 4 , 775 , 1 50 

7,377,577 

Deficiency $283,337 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  135 

The  docks  occupied  by  the  city  for  municipal  purposes  are 
assessed  at  $20.000,000,  and  the  value  of  the  use  may  be  estimated 
as  7  per  cent  over  and  above  taxes,  or  $1,400,000,  giving  an 
apparent  net  return  on  the  whole  investment  of  approximately 
$1,100,000,  or  approximately  $17,000,000  less  than  its  fair  rental 
value.  The  city  is  now  engaged  in  completing  docks  on  Staten 
Island  costing  $25,000,000,  which  have  already  been  rented  at 
an  annual  loss  of  $600,000. 

The  city  had  outstanding  in  1920  bonds  issued  for  docks  and 
ferries  amounting  to  $101,372,036  (greater  now)  on  which  it 
paid  $4,353,46-1  in  interest,  or  $3,153,464  more  than  its  apparent 
complete  net  return. 

B.  Subivays. —  The  cost  to  the  city  of  the  original  subways, 
that  is,  the  Bronx-Manhattan  line  and  the  Brooklyn  line,  was 
$51,013,724,  the  amortization  and  interest  charges  on  which  are 
paid  under  the  terms  of  the  contracts  under  which  they  were  built. 

The  amount  expended  or  placed  under  contract  for  the  con- 
struction of  the  dual  subways,  that  is,  those  built  under  Contract  3 
(Interborough)  and  Contract  4  (Brooklyn  Rapid  Transit), 
appeared  on  March  1,  1921,  to  be  $2'26,220,432.  In  addition 
to  these  sums,  the  city's  contractual  obligation  to  complete  lines 
now  building,  or  still  to  be  built  under  the  dual  contracts,  will 
require  an  additional  expenditure  estimated  at  $40,000,000,  for 
which  provision  has  not  yet  been  made.  The  city  paid  in  interest 
on  this  indebtedness  for  1920  $7,250,000,  for  which  it  received 
no  return. 

It  may  be  a  counsel  of  perfection  to  suggest  that  the  city's 
property  interest  in  the  subways  vastly  exceeds  the  amount  of  the 
investment,  and  should  give  a  handsome  revenue  to  the  city 
treasury.  It  will  be  a  step  in  the  right  direction  when  the 
receipt^  equal  the  disbursements. 

C.  Ferries. —  The  ferries  likewise  are  unprofitable.    The  state- 
ment for  1920  is  as  follows: 

Total 

receipts  Expenditures 

Staten  Island  division $1 ,446,490  87  $2,011 ,514  04 

Brooklyn  division 192,252  99  594,485  43 

Astoria  division 27,589  90  205,483  69 

$1,666,333  76      $2,811,483  16 

Over  receipts 1,145,149  40 

of  disbursements  over  receipts 1 ,045, 149  40 


Excess 


To     this     must     be     added     interest     and     depreciation     on 
$8,668,345.24,  expended  for  wharf  property  and  construction  of 


136       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

terminals  since  1903,  and  interest  and  depreciation  on  terminal 
property  of  the  city  acquired  before  1903,  amounting  at  a  con- 
servative estimate  to  $600,0000  annually. 

The  city  has  expended  since  1903  $4,357,270.29  for  boats. 
Their  present  inventory  value  or  rate  of  depreciation  does  not 
appear,  but  it  must  be  a  very  considerable  sum.  Two  million 
dollars  would  be  a  conservative  estimate  of  the  annual  loss  from 
operation  of  the  ferries. 

The  annual  loss  on  docks,  subways  and  ferries  foots  up  over 
$26,000,000.  It  may  be  noted  in  this  connection  that  there  is 
no  profit  and  loss  account  on  city  owned  property.  Such  state- 
ments would  contribute  to  economy  in  management  and  expendi- 
ture. While  the  properties  were  acquired  for  the  accommoda- 
tion of  the  public,  they  were  also  acquired  for  the  expectation 
that  they  would  be  self-sustaining',  and  a  source  of  revenue  rather 
than  a  drag  on  the  city  treasury  and  a  burden  to  the  taxpayer. 
The  city  treasury  gets  none  of  the  receipts  from  the  docks  or 
ferries  which  are  paid  into  the  sinking  funds  of  the  old  City  of 
New  York,  and  the  city  borrows  such  receipts  on  general  fund 
bonds.  The  subway  receipts  are  absorbed  in  providing  for  amor- 
tization and  interest.  Nothing  could  be  more  unsound  financially 
or  absurd  than  the  exemption  of  $51,000,000  of  subway  bonds 
and  $69,000,000  of  dock  bonds  to  enable  the  city  to  incur 
further  debt,  when  the  subways,  as  a  whole,  and  the  docks  and 
ferries  are  run  at  a  fearful  loss.  The  constitutional  amendment 
of  1909  manifestly  contemplated  that  these  properties  should  be 
self-supporting,  but  carelessness  in  drafting  and  skill  in  manipu- 
lating its  provisions  have  enabled  the  city  to  avoid  to  its  own 
detriment  compliance  with  this  requirement. 

THE  ABANDONMENT  OF  THE  "  PAY-AS- You-Go  "  POLICY 
Among  the  abuses  in  financial  management  in  the  city,  none 
is  of  greater  importance  than  the  virtual  abandonment  of  the 
"  pay-as-you-go  "  policy.  When  the  city,  to  avoid  defaulting  on 
its  securities,  found  it  necessary  to  borrow  $100,000,000  in  1914, 
the  syndicate  which  financed  the  loan  imposed  as  a  condition  of  its 
negotiation  the  adoption  of  the  pay-as-you-go  policy,  and  the  board 
of  estimate,  on  the  llth  day  of  September,  1914,  adopted  the 
following  resolution : 

"  Resolved,  That  the  Board  of  Estimate  and  Apportion- 
ment hereby  declares  that  it  will  pursue  the  following  plan 
in  financing  public  improvements : 


REPORT  OF  JOINT  LEGISLATIVE   COMMITTEE  137 

"(1)  The  cost  of  all  improvements  of  the  revenue-produc- 
ing class,  such  as  rapid  transit,  docks,  railway  aiiu  water 
terminals  and  water  supply,  shall  be  defrayed  oy  the  issue 
of  nity-year  corporate  stock  as  neretoiore; 

"('2)  The  cost  of  all  permanent  improvements,  other  than 
those  of  the  revenue-producing  class,  hereafter  authorized  by 
this  board,  shall  be  financed  as  follows : 

"(a)  Those  authorized  subsequent  to  the  passage  of  this 
resolution  and  during  the  year  1915  shall  be  paid  ior,  three- 
quarters  by  the  issue  of  fifteen  year  corporate  stock.  The 
corporate  stock  so  issued  shall  mature  either  in  not  more 
than  fifteen  years,  amortized  as  provided  by  law,  or  in  equal 
annual  installments,  during  a  period  of  not  more  than  fifteen 
years.  The  remaining  one-quarter  of  the  cost  of  such 
improvements  shall  be  paid  through  the  medium  of  a  one- 
year  bond  payable  from  the  next  annual  tax  budget. 

"(b)  Those  authorized  in  the  year  1916  shall  be  paid  for, 
one-half  by  the  issue  of  corporate  stock  maturing  as  afore- 
said. The  remaining  one-half  of  the  cost  of  such  improve- 
ments shall  be  paid  through  the  medium  of  a  one-year  bond 
payable  from  the  next  annual  tax  budget. 

u(c)  Those  authorized  in  the  year  1917  shall  be  paid  for, 
one-quarter  by  the  issue  of  corporate  stock  as  aforesaid.  The 
remaining  three-quarters  of  the  cost  of  such  improvements 
shall  be  paid  through  the  medium  of  a  one-year  bond  payable 
from  the  next  annual  tax  budget. 

a(d)  The  foregoing  statements  of  policy  contemplate  the 
financing  of  improvements  authorized  during  the  year  1918 
and  subsequent  years  through  the  inclusion  of  the  entire 
cost  thereof  in  the  annual  budget  of  the  City,  excepting  the 
revenue-producing  improvements  hereinbefore  mentioned. 

"(3)  In  so  far  as  corporate  stock  notes  issued  by  the  City 
•of  Xew  York  as  a  part  of  the  proposed  plan  of  $100,000,000 
shall  be  retired  by  issues  of  corporate  stock,  the  corporate 
stock  so  issued  shall  mature  as  provided  in  clauses  (a),  (b) 
and  (c)  of  paragraph  2  of  these  resolutions. 

"(4)  The  cost  of  public  works  already  authorized,  whether 
under  contract  or  not,  but  in  respect  of  which  new  bonds 
are  to  be  issued,  is  to  be  financed  in  the  same  manner  as 
above  provided,  with  the  exception  of  the  cost  of  revenue- 
producing-  improvements  hereinbefore  mentioned. 


138       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

"  Nothing  herein  contained  shall  be  deemed  to  affect  their 
corporate  stock  or  assessment  bonds  issued  to  replenish  the 
street  improvement  fund  or  the  fund  for  street  and  park 
openings." 

The  joint  legislative  committee  in  1916  recommended  the  enact- 
ment of  a  statute  embodying  the  provisions  of  this  resolution. 
By  section  2  of  chapter  615  of  the  Laws  of  1916  it  was  accord- 
ingly enacted: 

"  The  City  of  New  York  shall  not,  except  as  hereinafter 
provided,  expend  any  part  of  the  proceeds  of  sales  of  cor- 
porate stock  or  serial  bonds  for  other  than  revenue-producing 
improvements." 

By  the  terms  of  the  act  of  1916  this  policy  first  took  full  effect 
in  the  year  1918.  As  the  pressure  of  war  finances  was  at  its 
height  in  that  year,  the  city  applied  for  and  secured  by  chapter  658 
of  the  Laws  of  1918,  the  suspension  of  the  pay-as-you-go  policy 
to  permit  the  issue  of  "  fifteen  million  dollars  for  each  calendar 
year  of  the  present  war,  dating  from  January  1,  1918,  and  for 
one  year  after  the  termination  of  the  war  *  *  *.  For  the 
purposes  of  this  act,  the  termination  of  the  war  shall  be  as  fixed 
by  proclamation  of  the  President  of  the  United  States." 

Owing  to  the  failure  to  proclaim  peace  until  the  year  1921,  the 
city  secured  by  this  act  the  right  to  issue  $15,000,000  of  long- 
term  bonds  for  a  period  of  five  years,  and  has  taken  full  advantage 
of  the  act,  issuing  the  full  $75,000,000.  While  within  the  law, 
it  was  not  within  the  spirit  of  the  law,  and  constitutes  a  serious 
evasion  of  this  sound  principle  of  finance. 

Notwithstanding  the  relief  thus  secured,  the  city  again  applied 
for  a  modification  of  the  policy,  and  by  the  enactment  of  chap- 
ter 960  of  the  Laws  of  1920,  exempted  from  its  provisions,  long- 
term  bonds  for  the  erection  of  school  buildings,  and  the  acquisition 
of  sites.  The  purpose  of  the  act  is  by  this  means  subverted, 
and  the  city  has  in  the  brief  period  since  1916  issued  approxi- 
mately $100,000,000  of  corporate  stock  or  long-term  bonds  in 
violation  of  the  pledge  of  the  city  made  in  1914. 

TAX  LIMIT  EXCEEDED 

The  constitutional  2  per  cent  tax  limit  is  fixed  and  determined 
by  the  valuation  of  the  real  and  personal  estate  of  the  city  as 
shown  by  the  last  assessment-rolls,  and  not  as  shown  by  the  cur- 
rent assessment-rolls.  The  city,  therefore,  in  1921  exceeded  the 
tax  limit  by  $20,000,000. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  139 

The  last  sentence  in  section  10  of  article  8  of  the  Constitution 
provides : 

"  The  amount  hereafter  to  be  raised  by  tax  for  county  or 
city  purposes,  in  any  county  containing  a  city  of  over  one 
hundred  thousand  inhabitants,  or  any  such  city  of  this  state, 
in  addition  to  providing  for  the  principal  and  interest  of 
existing  debt,  shall  not  in  the  aggregate  exceed  in  any  one 
year  two  per  centum  of  the  assessed  valuation  of  the  real 
and  personal  estate  of  such  county  or  city,  to  be  ascertained 
as  prescribed  in  this  section  in  respect  to  county  or  city 
debt." 

Referring  to  the  clause  in  the  same  section  as  to  county  or  city 
debt,  it  reads: 

"  No  county  or  city,  shall  be  allowed  to  become  indebted 
for  any  purpose  or  in  any  manner  to  an  amount  which  includ- 
ing existing  indebtedness  shall  exceed  ten  per  centum  of  the 
assessed  valuation  of  the  real  estate  of  such  county  or  city, 
subject  to  taxation  as  it  appeared  by  the  assessment  rolls  of 
said  county  or  city  on  the  last  assessment  for  state  or  county 
taxes  prior  to  the  incurring  of  such  indebtedness." 

It  is,  therefore,  clear  that  the  assessment  referred  to  in  the 
tax  limit  provision  is  the  last  assessment,  and  not  the  current 
assessment. 

The  assessed  valuation  of  the  real  and  personal  estate  of  the 
city  for  1920  was  $8,922,627,892  and  for  1921  $10,186,207,279. 
The  tax  levy,  exclusive  of  debt  service  and  State  tax,  was  barely 
within  the  2  per  cent  limitation  of  $203,724,145.58,  if  computed 
on  the  assessment  of  1921.  It  exceeded  2  per  centum  on  the 
assessment  of  1£)20  ($178,452,557.84)  by  approximately  twenty 
millions  of  dollars.  Each  tax  levy  prior  to  1921  has  been  uni- 
formly within  2  per  cent  of  the  tax  levy  of  the  preceding  year. 
The  1921  levy  was  a  clear  violation  of  the  constitutional  pro- 
vision as  hitherto  understood  throughout  the  State.  Tax  rolls 
are  not  completed  until  they  are  extended,  and  the  tax  roll  of  the 
city  for  1921,  the  current  tax  roll  on  which  this  limitation  was 
sought  to  be  made,  was  not  completed  until  March  28,  19'21, 
when  the  tax  in  excess  of  the  limit  was  assessed.  It  was  not 
assessed  upon  the  last  assessment-roll  as  required,  but  upon  the 
current  assessment-roll.  The  reasons  for  this  conclusion  were 
presented  to  the  Committee  during  the  examination  of  the  city 


140       INVESTIGATION  OF  AFFAIKS  OF  NEW  YORK  CITY 

officials  in  an  opinion  by  its  counsel,  which  is  annexed  to  this 
report  as  a  part  oi  Exhibit  "  K." 

The  city  has  violated  the  spirit  and  purpose  of  the  2  per  cent 
tax  limitation  'by  using  the  receipts  from  income-paying  utilities 
for  expenses  and  charging  all  interest  on  the  bonded  debt  of  such 
utilities  to  debt  service.  The  city  received  from  Croton  water  rent, 
through  the  general  fund  bonds  statute  in  1920,  $9,471,722.74; 
from  docks,  $6,974,093.31;  from  ferries,  $1,633,677.56,  or  over 
$18,000,000,  and  collected  by  taxes  for  debt  service,  interest  on 
the  Croton  water  debt,  $8,619,289.17,  and  interest  on  the  bonded 
debt  of  docks  and  ferries,  $3,940,402.40.  Under  this  practice, 
the  more  the  city  is  in  debt  for  income-paying  properties,  the 
greater  will  be  its  available  funds  for  expenses  in  excess  of  the- 
2  per  cent  tax  limitation.  To  illustrate:  If  the  city,  having 
reached  the  2  per  cent  limit,  purchases  or  contracts  for  a  public 
utility  costing  a  hundred  million  dollars,  for  which  bonds  are 
issued,  with  an  annual  amortization  and  interest  charge  of 
$4,000,000,  and  a  revenue  of  $3,000,000,  amortization  and  the 
interest  charge  of  $4,000,000  go  into  the  debt  service,  and  the 
$3,000,0*00  revenue  goes  into  the  city  treasury  for  expenses  in 
excess  of  the  2  per  cent  tax  rate.  The  comptroller  testified, 
"  This  acts  in  practical  effect  to  expand  the  tax  limit." 

DEBT  LIMIT  EXCEEDED 
Section  10,  article  8,  of  the  Constitution  provides : 

"  No  county  or  city  whose  present  indebtedness  exceeds 
ten  per  centum  of  the  assessed  valuation  of  its  real  estate  sub- 
ject to  taxation,  shall  be  allowed  to  become  indebted  in  any 
further  amount  until  such  indebtedness  shall  be  reduced 

within  such  limit." 

• 

In  the  freqnent  amendments  to  this  section,  relief  has  been 
granted  the  City  of  New  York  by  the  following  exceptions  to 
this  rule: 

First. —  Revenue  bonds  issued  against  taxes  in  the  levy  of  the 
year  in  which  they  are  issued.  Of  these  the  amount  outstanding 
has  averaged  a  hundred  million  dollars  in  recent  years. 

Second* —  Special  revenue  bonds  issued  against  taxes  to  be 
levied  in  the  next  .succeeding  year.  Of  these  about  thirty  million 
dollars  have  been  issued  in  each  of  the  last  two  years. 

Third. —  Bonds  for  water  supply,  of  which  $206,000,000  are 
now  outstanding. 

Fourth. —  County  bonds  amounting  to  $6,600,000. 


REPOKT  OF  JOINT  LEGISLATIVE  COMMITTEE  141 

Fifth. —  Debts  hereafter  incurred  for  revenue  purposes  where 
such  revenue  exceeds  repairs,  maintenance,  interest  and  amortiza- 
tion charges.  This  may  be  regarded  as  a  dead  letter,  as  the  city 
is  a  stranger  to  such  investments. 

Sixth. —  Any  indebtedness  heretofore  (1909)  incurred  by  the 
City  of  New  York  "  for  any  rapid  transit  or  dock  investment 
may  be  so  excluded  proportionately  to  the  extent  to  which  the 
current  net  revenue  received  by  said  city  therefrom  shall  meet 
the  interest  and  amortization  installments  thereof,  provided  that 
any  increase  in  the  debt  incurring  power  of  the  City  of  New  York 
which  shall  result  from  the  exclusion  of  debts  heretofore  incurred 
shall  be  available  only  for  the  acquisition  or  construction  of 
properties  to  be  used  for  rapid  transit  or  dock  purposes." 

Attention  is  now  directed  to  the  sixth  exception. 

The  margin  of  the  city's  debt  incurring-  power  is  reported  by 
the  comptroller  as  follows : 

January  1,  1918 $18,419,078  91 

January  1,  1919 52,099,492  55 

January  1,  1920 21,439,370  05 

January  1,  1921 34,804,248  86 

January  1,  1922 133,645,964  51 


In  reaching  these  results  the  comptroller  in  each  of  his  state- 
ments has  treated  as  exempt  from  the  debt  limit  $120,000,000 
under  this  exception  ($69,000,000  for  docks  and  $51,000,000  for 
subways),  thus  allowing  to  the  city  a  debt  incurring,  power  for 
other  purposes  than  docks  and  subways  of  $120,000,000.  This 
exemption  is  not  justified  by  the  Constitution.  The  bonds  are 
not  excluded  for  general  purposes ;  the  exclusion  is  for  a  specific 
purpose  only,  viz.,  docks  and  rapid  transit,  and  the  debt  incurring 
power  of  the  city  is  increased  in  this  sum  for  no  other  purpose. 
Except  for  such  purpose,  the  excluded  bonds,  as  well  as  the  debt 
subsequently  incurred,  must  be  treated  as  a  part  of  the  debt  of 
the  city  in  fixing  its  debt  limit.  The  city's  debt  incurring  power 
as  of  January  1,  1922,  is,  therefore,  $13,645,964.51,  and  not 
$133.645,964.51,  and  the  city  has  incurred  debt  in  excess  of  trie 
constitutional  limit  in  each  of  the  preceding  years  referred  to, 
and  for  most  of  the  time  since  the  alleged  exemption  of  the  dock 
and  rapid  transit  bonds.  The  opinion  of  the  counsel  of  the  Com- 
mittee presented  to  the  Committee  during*  the  examination  of 
the  city  officials  on  this  point  is  contained  in  Exhibit  "  L,"  hereto 
attached. 


142       INVESTIGATION  or  AFFAIRS  OF  NEW  YORK  CITY 

GENERAL  CONSIDERATIONS  ON  THE  TAX  LIMIT  AND  DEBT  LIMIT 

As  the  tax  limit  and  the  debt  limit  are  a  source  of  annoyance 
to  those  seeking  other  and  greater  appropriations,  some  advocate 
their  repeal,  claiming  that  u  the  strength  of  sin  is  the  law.'7  They 
would  abolish  the  sin  by  repealing  the  law.  But  these  principles 
have  their  roots  in  economic  law,  the  law  of  personal  rights  and 
the  law  of  self-preservation  by  the  State.  Without  such  restraints 
taxable  property  would  be  confiscated,  the  financial  soundness  of 
the  city  imperiled,  and  when  the  tax-bearing  capacity  is  exhausted 
the  State  would  be  deprived  of  its  potential  capacity  to  tax  for 
State  purposes  63  per  cent  of  its  real  estate. 

Financial  abuses  in  city  management,  and  the  failure  to  correct 
or  attempt  to  correct  them,  all  indicate  an  indisposition  to  retrench 
or  economize.  Remedies  are  not  hard  to  find,  they  are  at  hand, 
but  not  employed.  Expenditures  and  employment,  made  on  a 
war  basis,  have  not  been  reduced.  The  State,  the  Nation  and 
all  private  business  have  made  heavy  cuts  in  their  budgets,  but 
the  city  not.  City  officials  without  exception  denied  before  the 
Committee  the  possibility  of  economies  in  any  other  way  than 
the  fall  in  price  of  commodities,  and  the  expenditures  show  an 
unrestrained  growth.  This  curiosity  could  not  exist  in  any  other 
municipality  in  the  State,  or  even  in  the  city,  with  an  informed 
public  opinion.  The  weight  of  taxes  in  the  long  run  falls  as 
heavily  upon  the  poor  as  upon  the  rich.  It  is  easier  for  the  tax- 
payer to  realize  this  when  he  pays  his  taxes  than  for  the  tenant 
when  he  pays  his  rent  or  buys  his  groceries. 

In  searching  for  reasons  for  this  apparently  inexplicable  con- 
dition of  the  public  mind,  the  Committee  caused  a  census  of  the 
taxpaying  and  nontaxpaying  voters  to  be  taken  in  nineteen  elec- 
tion districts,  selected  in  the  city  at  random.  The  returns  show 
8,477  nontaxpaying  voters  and  521  taxpaying  voters.  One  dis- 
trict returned  493  nontaxpaying  voters  and  one  taxpaying  voter. 

For  census  see  Exhibit  "  M." 

MANIFEST  FINANCIAL  REFORMS 

Among  the  reforms  which  present  conditions  call  for  are  the 
following : 

Docks $17,000,000 

Subways  (amortization  and  interest  on  bonds)  .  .  .  7,250,000 

Ferries 2,000,000 

Actuarial  payment  of  funded  debt 4,000,000 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  143 

Retrenchment  from  3  per  cent  to  10'  per  cent  on 

city's  expenses  of  administration  (3  per  cent)  .  .  5,500,000 

Saving  by  advancing  the  tax  dates 5,500,000 

Saving  by  bringing  county  government  under  the 

jurisdiction  of  the  city 2,500,000 

Additional  State  appropriation  for  schools 15,000,000 


$58,750,000 

These  reforms  cannot  be  hoped  for  from  the  city  government 
as  now  organized.  They  cannot  be  achieved  by  law  alone,  but 
they  can  be  met  by  a  reorganization  of  city  government  with  the 
aid  of  law.  An  indispensable  condition  is  the  constitution  of  a 
board  of  finance,  or  some  similar  body,  as  recommended  in  the 
Committee's  first  report.  A  redistribution  of  powers  among  exist- 
ing officials  and  boards  will  be  more  of  the  same  thing,  and  with- 
out effect. 

It  is  not  claimed  that  these  reforms  can  all  be  immediately 
realized,  but  the  plan  can  be  immediately  put  in  operation,  great 
progress  made  promptly,  and  the  end  reached  within  a  reasonable 
time. 

While  some  small  relief  may  come  from  stopping  mandatory 
legislation,  it  will  amount  only  to  the  difference  between  the  sums 
required  by  law  and  the  sums  the  city  would  expend  for  the  same 
purposes.  The  greatest  injury  to  the  city  from  this  legislation 
lies  in  its  use  as  a  screen  to  hide  great  and  substantial  faults  of 
city  management. 

STATE  TAXES 

The  city  cannot  escape  bearing  its  share  of  the  burden  of  State 
taxes.  The  legislative  committee  of  1915  found  the  indirect 
taxes  were  equitably  distributed  over  the  whole  State.  The  direct 
State  taxes  are  really  negligible,  amounting  to  $22,041,183.27 
in  1921.  The  city  received  from  State  taxes  in  the  same  year 
$44,499,014.62.  The  State  is  now  paying  the  city  for  schools 
nearly  as  much  as  the  direct  State  tax  of  1921.  Inequalities, 
if  any,  are  not  hard  to  correct,  but  they  will  not  be  reached  by 
outcries  against  so  small  a  burden  to  maintain  the  State  of  which 
the  city  is  a  part,  when  63  per  cent  of  the  value  of  all  real  prop- 
erty is  in  the  city.  The  State  tax,  like  mandatory  legislation, 
is  a  mote  to  distract  attention  from  the  beams.  The  city  taxes 
were  in  1921,  $284,146,634.  The  people  of  the  city  paid  to  the 
Federal  government  $859,851,705.63,  of  which  more  than  $634,- 


144       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

000,000  was  for  income  taxes.  Not  an  unnecessary  dollar  of 
State  tax  should  be  imposed,  but  the  relative  importance  of  the 
interests  provided  for  cannot  be  overlooked. 

FINANCIAL  REQUIREMENTS  OF  CITY 

Besides  the  ordinary  city  expenses,  the  city  requires  vast  sums 
of  money  for  new  improvements.  The  Transit  Board  fixes  the 
amount  required  for  subways  at  $500,000,000  in  the  next  ten 
years,  of  which  $200,000,000  will  be  required  within  five  years. 
Docks,  a  marginal  railway,  markets,  schools,  tunnels  and  bridges 
are  all  necessary  to  the  welfare  of  the  city.  A  billion  dollars  for 
extraordinary  expenses  will  not  more  than  suffice  in  the  next  ten 
years.  Under  the  present  management  the  city  cannot  meet 
these  expenditures  from  current  revenues,  or  by  incurring  debt, 
but  if  it  will  put  its  house  in  order  and  practice  economies,  com- 
mon to  States,  municipalities  and  private  business,  it  can  make 
satisfactory  progress. 

NECESSITY  OF  CONSTITUTIONAL  AMENDMENT 
The  constitutional  provisions  affecting  the  city  are  found  in. 
section  10,  article  8  of  the  Constitution.  Since  its  adoption  in 
1894,  it  has  been  amended  five  times  by  the  insertion  of  clauses 
of  exemption  and  exception  principally  to  meet  temporary 
emergencies  in  city  finances.  The  result  is  a  hodge-podge.  It  is 
involved.  The  new  clauses,  inserted  without  recasting  the  entire 
section,  frequently  confuse  the  meaning  of  the  whole.  The  sec- 
tion now  covers  many  unrelated  matters,  and  instead  of  being  a 
constitutional  guide,  is  a  labyrinth  of  words  and  provisions  in 
which  the  reader  is  lost.  It  serves  as  often  to  foster  violations 
of  sound  finance  as  to  prevent  them.  The  section  should  be  re- 
drawn in  several  sections  and  re-enacted  to  meet  the  conditions 
described  in  this  report. 

RECOMMENDATIONS  FOR  RELIEF 

I.  The   Committee  recommends  changing  the  tax  dates  from 
May  first   and  November  first  to  January  first   and  July  first, 
under  a  system  of  gradual  change  to  the  prior  month,  and  annex 
a  copy  of  the  proposed  bill  for  that  purpose. 

II.  Restoration  of  the  "  Pay-as-you-go  "  policy,  as  enacted  in 
1916. 

III.  Abolition  of  the  sinking  funds  at  the  earliest  day  prac- 
ticable and  of  the  sinking  fund  commission.     Care  of  the  funds 
to  be  vested  in  the  Comptroller. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  145 

IV.  Repeal  of  the  general  fund  bond  legislation,  and  the  appli- 
cation of  all  sinking  lund  receipts  to  the  payment  of  interest  and 
reduction  of  the  city  debt,  and  specifically  of  the  application  of 
funds  received  from  the  income-paying  properties  to  the  debts 
created  for  the  acquisition  of  such  properties. 

V.  Placing   public    utilities    on    a    self -support  ing    and    inde- 
pendent basis,  with  separate  profit  and  loss  accounts. 

VI.  Inauguration  of  an  actuarial  system  of  payments  to  pro- 
vide for  the  existing  debt,  and  the  inauguration  of  a  new  serial 
bond  system  on  the  same  basis  to  provide  for  new  debt. 

VII.  Amending  section  10,  article  8  of  the  Constitution  in 
accoi dance  with  the  recommendations  of  this  report. 

VIII.  Simplification    of   government    through   such   constitu- 
tional amendment  and  enactment  of  statutes  in  accordance  with 
the  terms  of  this  report. 

The  Committee  refers  to  recommendations  already  made  bear- 
ing upon  the  finances  of  the  city  as  follows : 

(a)  First    Report. —  Recommending    the    establishment    of    a 
finance  board  of  nine  members,  to  be  elected  'by  the  city  at  large 
for  six  years,  three  to  be  elected  every  other  year. 

(b)  Second  Report. —  Department  of  Docks,  recommending  a 
new  dock  commission  of  three  members,  to  be  appointed  by  the 
mayor,  one  from  a  list  to  be  named  by  the  maritime  interests 
of  the  city,  one  from  a  list  to  be  named  by  the  New  York  Chamber 
of  Commerce,  and  one  at  will,  who  shall  be  chairman  of  the  com- 
mission, with  an  eight  year  tenure  of  office. 

(c)  Third  Report. —  Recommending  the  granting  of  complete 
autonomy  to  a  board  of  education  appointed  on  nonpolitical  lines. 
Reference   is  had  to  these  reports  for  a  full  statement  of  the 
Committee's  recommendations. 

Respectfully  submitted, 

SCHUYLER  M.  MEYER,  Chairman, 
THEODORE  DOUGLAS  ROBINSON, 
FREDERICK  W.  KAVANAUGH, 
MAXWELL  S.  HARRIS, 
SIMON  L.  ADLER, 
SOL  ULLMAN, 
JOHN  R.  YALE, 
THEODORE  STITT, 
WALTER  W.  WESTALL. 
ELON  R.  BROWN, 

Counsel. 


146       INVESTIGATION  OF  AFFAIKS  OF  NEW  YORK  CITY 

EXHIBIT  "A" 
Showing  Growth  of  Net  Funded  Debt  Less  Sinking  Fund  Since 

Consolidation 
Year 

1898    $250,510,551  64 

1899    256,843,289  25 

1900    277,691,434  97 

1901    298,873,969  50 

1902    311,760,974  30 

1903    334,176,991  30 

1904    400,945,164  75 

1905    430,477,000  39 

1906    474,653,205  12 

1907    537,577,801  03 

1908    589,045,654  07 

1909 648,062,228  92 

1910    689,363,508  53 

1911    760,995,992   15 

1912    827,910,800  94 

1913    820,064,364  22 

1914    892,172,621  88 

1915    942,216,168  29 

1916    973,734,136  52 

1917  1,007,495,164  14 

1918  1,020,481,661  25 

1919  1,025,583,349  79 

1920 1,027,811,089  70 

1921  1,031,201,252  27 

EXHIBIT  "B" 

Showing  Cost  of  Administration,  Debt  Service,  Tax  Deficiencies, 
State  Taxes  and  Total  Budget  Since  1910 

Cost  of  Tax 

YEAR  administration  State  taxes  Debt  service  deficiencies  Grand  total 

1910 $112,684,57465      $46,443,695  72  $4,000,000  00  $163,128,270  37 

1911 113,306,01317      50,661,8219910,000,00000  173,967,83516 

1912 122,247,01595  $4,301,34565  51,254,25817  3,287,36674  181,090,25631 

1913 127,487,02786  7,947,03196  54,977,38134  2,300,00000  192,711,44116 

1914 133,307,73054  4,576,30343  52,611,51765  2.500,00000  192,995.55162 

1915 133,045,31304      59,832,38104  6,112,09214  198,989,78652 

1916 131,767,94570  13,975,02173  63,213,21011  4,000,00000  212,956,17754 

1917 136,369,56787      69,744,56895  5,000,00000  211,114,13682 

1918 150,969,54280  8,463,75638  75,590,46002  3,100,00000  238,123,75920 

1919 159,735,86717  8.522,62961  77,931,93810  1,835,00000  248,025,43488 

1920 188.663,79010  8,539,15637  74,811,53866  1,675,00000  273,68948513 

1921 216,280,33020  22,041,18327  105,528,52730  1,680,00000  345,530,03977 


REPOKT  OF  JOINT  LEGISLATIVE  COMMITTEE 


147 


EXHIBIT  "C" 

Showing  Budget  Total,  General  Fund  Revenues  Deducted  and 
Amount  of  Tax  Levy 


General 

Total 

Fund 

Year 

Budget 

Revenue 

Tax  levy 

1899  

$95,209,259  84 

$9,026,191  26 

$86,183,768  58 

1900  

92,397,446  46 

9,855,272  71 

82,542,173  75 

1901  

99,826,582  67 

11,787,949  88 

88,038,632  79 

1902  

100,349,619  30 

11,396,711  67 

88,952,907  63 

1903  

98,898,968  92 

21,266,304  98 

77,632,663  94 

1904  

108,592,693  48 

22,521,665  21 

86,071,028  27 

1905  

111,964,648  52 

22,979,002  77 

88,985,645  75 

1906  

119,032,841  75 

24,934,694  33 

94,098,147  42 

1907  

130,915,324  19 

28,965,070  61 

101,950,253  58 

1908  

143,997,841  74 

27,454,945  65 

116,542,896  09 

1909  

156,976,273  01 

34,231,062  84 

122,745,210  17 

1910  

163,509,272  56 

32,030,989  45 

131,478,283  11 

1911  

174,394,997  51 

32,154,342  95 

142,240,654  56 

1912  

181,477,865  09 

30,971,807  62 

150,506,057  47 

1913  

193,189,076  31 

41,581,991  46 

151,607,084  85 

1914  

193,382,860  69 

43,235,935  35 

150,146,925  34 

1915.  ...... 

200,618,401  32 

40,831,063  61 

159,787,337  71 

1916  

213,647,436  34 

37,996,936  34 

175,650,500  00 

1917  

212,670,401  26 

35,827,901  26 

176,842,500  00 

1918  

...     241,633,829  47 

38,233,016  67 

203,400,812  80 

1919  

248,588,256  70 

43,831,760  98 

204,756,495  72 

1920  

273,689,485  13 

60,020,647  78 

213,668,837  35 

1921  

345,530,039  77 

63,216,718  87 

282,313,320  90 

EXHIBIT  "D 

» 

Schedule 

of  Real  and  Personal  Property  Assessments  Since  1918 

Personal 

Year 

Real  estate 

property 

Grand  totals 

1898  

$2,533,730,809 

$548,987,900 

$3,082,718,709 

1899  

2,932,445,464 

545,906,565 

3,478,352,028 

1900  

3,168,557,700 

485,574,495 

3,654,132,195 

1901  

...       3,237,778,261 

550,192,612 

3,787,970,873 

1902  

3,330,647,579 

526,400,139 

3,857,047,718 

1903  

4,751,550,826 

680,866,092 

5,432,416,918 

1904  

5,015,463,779 

625,078,878 

5,640,542,657 

1905  

5,221,582,301 

690,561,926 

5,912,144,227 

1906  

5,738,487,245 

567,306,940 

6,305,794,185 

1907  

6,240,480,602 

554,861,313 

6,795,341,915 

1908  

6,722,415,789 

435,774,611 

7,158,190,400 

1909  

6,807,179,704 

443,320,855 

7,250,500,559 

1910  

7,044,192,674 

372,644,825 

7,416,837,499 

1911  

7,858,840,164 

357,923,123 

8,216,763,287 

1912  

7,861,898,890 

342,963,540 

8,204,862,430 

1913  

8,006,647,861 

325,418,440 

8,332,066,301 

1914  

8,049,859,912 

340,295,560 

8,390,155,472 

1915  

...       8,108,760,787 

352,051,755 

8,460,812,542 

1916  

8,207,822,361 

376,530,150 

8,584,352,511 

1917  

8,254,549,000 

419,156,315 

8,673,705,315 

1918  

8,339,642,851 

251,414,875 

8,591,057,726 

1919  

8,428,322,753 

362,412,780 

8,790,735,533 

1920  

...       8,626,121,707 

296,506,185 

8,922,627,892 

1921  

9,972,985,104 

213,422,175 

10,186,207,279 

148       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY. 

EXHIBIT  "  E  " 

Schedule   Showing   Yearly  Per  Capita   Cost   and   Average  Per 
Capita  Costs  Under  the  Various  Administrations 

Budget  appropriations 


Year: 
1  898  

Yearly  exclusive 
of  appropriation 
to  provide 
deficiency  in 
collection  of 
taxes 
$77,473,084  77 
93,520,082  03 
90,778,972  48 
98,100,413  43 

Per  capita 

Total  for  four    fPopulation, 
years                    yearly 
3,350,000 

4 

Yearly 
$23  12 
26  35 
26  41 
28   15 

Lverage 
for 
four 
years 

1899 

3  549  558 

1900 

3,437  202 

1901 

3,485,000 

Total  for  Robert  A.  Van 
Wyck,  administration. 
Year: 
1902                    

$26  04 
27  78 
31  90 
34  11 

$98,619,600  88 
97,119,031  10 
106,674,955  09 
109,817,593  03 

$359,872,552  71      
3,582,930 

$27  53 
26  58 
28  45 
28  53 

1903  
1904  
1905  

Total  for  Seth  Low  and 
Geo.      B.      McClellan, 
administration 

3,653,501 
3,750,000 
3,850,000 

412,231   180  10 

Year: 
1906 

$116,805,490  37 
127,421,505  66 
140,572,266  17 
153,622,701  06 

4  014  304 

$29   10 
30  68 
32  80 
34  73 

1907 

4  152,860 

1908  .  . 

4  285,435 

1909  . 

4  422,685 

Total       for       Geo.       B. 
McCellan,    administra- 
tion...   

538,421,963  26       

Year: 
1910 

$159,128,270  37 
163,967,835  16 
177,802,889  77 
190,411,441  16 

4  766  883 

$33  38 
33  33 
34  37 

35  44 

1911 

4,983,385 
5,173,064 
5,372,983 

1912 

1913 

*Total    for     William    J. 
Gaynor,        administra- 
tion   

691  310,436  46 

Year: 
1914  

$190,495,551  62 
192,877,694  08 
208,956,177  54 
206,114,136  82 

5,468,100 

$34  84 
34  53 
37  29 
35  92 

1915  
1916 

5,585,772 
5,602,841 
5,737,492 

1917.          .    . 

*Year  1313  of  Mayor  Gaynor's  adminsitration  completed  by  Ardolph  L.  Kline, 
t  Population  estimated  except  in  census  years. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE 


149 


EXHIBIT  "  E  "  —  (Concluded) 

Schedule   Showing   Yearly  Per   Capita  Cost  and  Average  Per 
Capita  Costs  Under  the  Various  Administrations 


Budget  appropriations 


Year; 

Total  for  John  Purroy 
Mitchell,  administra- 
tion  

Year: 

1918 $235,023,759  00 

1919 246,190,435  00 

1920 272,014,485  13 

1921..  .   343,850,039  77 


Yearly  exclusive 

~^ 

of  appropriation 

to  provide 

deficiency  in 

collection  of 

Total  for  four      Population, 

taxes 

years                 yearly 

$798,443,560  06 


5,872,143 
6,006,794 
5,620,048 
5,753,151 


Total  for  John  F.  Hylan, 

administration..  1,097,078,71890 


Per  capita 

Average 

for 
four 
Yearly     years 


$35  65 


47  18 


150       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 


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REPORT  OP  JOINT  LEGISLATIVE  COMMITTEE 


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154       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 


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REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  155 

EXHIBIT  "  H  " 

Schedule  of  Special  Revenue  Bond  Authorizations  During  Year 

1920 

Armory  Board $30,359  96 

Bellevue  and  allied  hospitals 92,605  19 

Board  of  Aldermen  and  City  Clerk 66,800  00 

Board  of  City  Record 294,371  37 

Department  of  Public  Welfare 240,724  9'2 

County  Clerk,  Kew  York  county 2,985  78 

County  Clerk,  Kings  county 655  82 

County  Clerk,  Queens  county 6,878  20 

County  Clerk,  Richmond   county    2,401  88 

County  Clerk,  Bronx  county 670  83 

Claims 963,620  70 

Commissions  and  commissioners 295,330  90 

Public  Service  Commission 117,890  52 

College  of  the  City  of  Xew  York 89,149  62 

Courts   444,610  28 

District  Attorney 37,015  31 

Department  of  Plant  and  Structures 1,093,501  42 

Department  of  Correction 19,959  37 

Department  of  Docks   85,298  3 

Department  of  Education 13,060,480  11 

Department  of  Health    247,150  13 

Department  of  Parks,     Manhattan    and    Rich- 
mond    84,955  59 

Department  of  Parks,  The  Bronx    49,145  62 

Department  of  Parks,  Brooklyn 51,805  09 

Department  of  Parks,  Queens 14,389  86 

Department  of  Street  Cleaning 6,899,970  76 

Department  of  Taxes  and  Assessments 6,657  73 

Department  of  Water    Supply,    Gas    and    Elec- 
tricity      169,513  38 

Fire  Department   1,732,812  15 

Miscellaneous   6,027,288  72 

Hunter  College  of  the  City  of  New  York.  .  .  .  .  .  31,567  66 

President,  Borough  of  Brooklyn 502,712  10 

Police  Department 173,628  83 

President,  Borough  of  Manhattan 1,191,187  04 

President,  Borough  of  Queens 648.586  51 

President,  Borough  of  Richmond   217,439  80 


156       INVESTIGATION  OF  AFFAIRS  OF  ^EW  YORK  CITY 

President,  Borough  of  the  Bronx $393,742  76 

Registers ; 189,433  43 

Sheriffs    26,386  39 

New  York  City  Employees'  Retirement  System.  13,184  58 

Tenement  House  Department 4,562  89 

Dreamland  Park  award 2,113,749  77 


Total $37,735,181  35 


EXH!BIT    "I" 

The  Story  of  the  City's  Sinking  Fund  Transactions  During  1920 
The  interlocking  and  interweaving  hodge-podge  of  revenues, 
internal  investments,  contributions,  redemptions,  interest  pay- 
ments and  transfers  all  gather  into  a  single  collection  of  fiscal 
accounts  in  the  City  Comptroller's  office,  constituting  a  record 
which  may  be  best  interpreted  by  tracing  the  origin  and  final 
resting  place  of  the  various  moneys,  with  some  attempt  toward 
making  a  statement  of  sinking  fund  affairs  in  the  order  of  their 
occurrence.  The  so-called  inter  se  transactions  are  marked  (*) 
in  each  case. 

An  old  and  underlying  account  bears  the  title : 

SINKING  FUND  FOR  THE  PAYMENT  OF  INTEREST  ON  THE  CITY  DEBT 

In  this  fund  there  was  a  cash  balance  on  January  1, 

1920,  of $1,639,420  39 

To  this  was  added  within  the  year  ended  December 

31,  1920,  revenue  received  by  the  city,  in  cash,  and 

paid  directly  into  this  fund  on  account  of  Croton 

water  rents  and  penalties $9,471,722  74 

Moneys  received  from  the  city  treasury  on  account 

of  the  redemption  of  its  obligations  as  held  for 

investment  by  this  fund  (See  Schedule  "A") ...  2,305,000  00 
Receipts    from    municipal    ferry    operations,    paid 

directly  into  this  fund 1 , 633,677  56 

Ferry  rents  and  leases 346,573  08 

Fees,  fines,  penalties,  costs,  etc 1 ,665,568  49 

House  and  ground  rents 452 , 101  07 

Interest  on  deposit 47 , 531  60 

Revenue  and  investments 110,936  72 

Interest  on  Croton  water  rents 48 , 345  96 

Water  lot  rent 599  10 

Fares— Astoria  ferry 27,060  51 

16,109,11683 

This  makes  a  total  for  the  year $17,748,537  22 


EEPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  157 


Out  of  which  there  were  disbursements  in  cash  as 

follows: 

Investments  in  Corporate  Stock  Notes  of  the  City 
of  New  York  issued  in  anticipation  of  the  sale  of 

corporate  stock  (See  Schedule  "  B  ") $3,200,000  00 

Interest  charges  met  on  city  debt  incurred  prior 

to  January,  1898 476,372  OS 

Refunds  of  revenue 21 , 863  66 

Payments  of  contributions  to  sundry  societies.  .  13,470  00 

These  disbursements,  in  connection  with  the 
balance  of  cash  on  hand  on  December  31.  1920, 
of...  736,831  48 


Aggregated  the  sum  of $4,448,537  22 

*The  remainder  becoming  a  matter  of  transfer  to 

another  account,  amounting  to  the  sum  of $13,300,000  00 

The  account  to  which  this  transfer  was  made  is  called:  == — • — ===== 

Sinking  Fund  for  the  redemption  of  the  City  Debt  No.  1 
The  cash  balance  of  this  account  on  January  1,  1920, 

was $940, 106  13 

*And  in  addition  to  the  transfer  above  described, 

amounting  to $13,300,000  00 

There  were  receipts  as  follows: 

Investments  of  this  fund  purchased  by  Sinking 

Fund  of  the  City  of  New  York 6,675,780  67 

"Investments  of  the  fund  maturing  in  1920  and 
redeemable  from  and  purchased  by  the  Sinking 

Fund  of  the  City  of  New  York 230,686  78 

Moneys  received  from  the  city  treasury  on  account 
of  the  redemption  of  its  obligations  as  held  for 

investment  by  the  fund  (See  Schedule  "A")  -  -  2,600,000  00 

Dock  and  slip  rents 6,974,093  31 

Forfeited  security  deposit 16,800  00 

Market  and  cellar  rents 420, 150  26 

Market  wagon  fees 18 , 873  25 

Privileges 11,652  44 

Franchises 501,753  33 

Permits,  street  vaults 210,089  97 

Fees,  fines  and  penalties 1 , 353  00 

Licenses 333,701  00 

Interest  on  sinking  fund  deposits 54 , 907  81 

Interest  on  city  treasury  balances 607,899  41 

Interest  on  general  fund  bonds 9,500,547  96 

Interest  on  all  other  bonds 1,448,455  73 

Water  lot  quit  rent 7  36 

Chamberlain's  commission  of  State  tax 10,660  23 

Collections  by  collector  of  assessments  and  arrears  42  65 

Interest  on  assessments 03 

42,917,455  19 


This  makes  a  total  for  the  year $43,857,561  32 

Out  of  which  there  were  disbursements  in  cash  as 
follows: 

Investments  in  corporate  stock  notes  of  the  City 
of  New  York,  issued  in  anticipation  of  the  sale 
of  corporate  stock $3,610,000  00 

Redemption  of  corporate  stock  held  by  the  public     7 , 305 , 300  00 

*Redemption  of  corporate  stock  maturing  in  1920, 
held  by  the  Sinking  Fund  of  the  City  of  New 
York..  172,00000 


158       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

Refunds  of  revenue $1 , 986  18 

These  disbursements,  in  connection  with  the  bal- 
ance of  cash  on  hand  December  31,  1920,  of.  .         268,275  14 


Aggregated  the  sum  of $11,357,561  32 

The  remainder  becoming  a  matter  of  transfer  to  the 
city  treasury,  and  by  it  devoted  to  the  acquire- 
ment of  general  fund  bonds  amountin*  to  the  sum 
of $32,500,000  00 

The  other  sinking  funds  of  the  City  of  New  York 
are  detailed  as  follows: 

Sinking  Fund  of  the  City  of  New  York 
The  cash  balance  of  this  account  on  January  1, 

1929,  was $553,631  12 

To  this  was  added  during  the  year,  cash  receipts 
as  follows: 

Annual  installment  from  1920  tax  budget $8,000,090  00 

Revenue  from  investments 4,006,435  32 

Moneys  received  from  the  city  treasury  on 
account  of  redemption  of  its  obligations,  as 
held  for  investments  by  this  fund  (See  Sched- 
ule "A") 10,630,000  00 

*In vestments  of  this  fund  maturing  in  1920, 
redeemed  by  sinking  fund  for  redemption  of 
City  Debt  No.  1 172,000  00 

*Investments  of  this  fund  maturing  in  1920, 
redeemed  by  Water  Sinking  Fund,  City  of 

New  York 25,000  00 

terest    on    balances    of   sinking   fund   bank 

deposits 21,636  84 

apid  transit  railroad  rentals. .  4,234  54 

22,859,306  70 


This  makes  a  total  for  the  year $23,412,937  82 

Out  of  which  there  were  disbursements  in  cash  as 

follows : 
Investments  in  corporate  stock  of  the  City  of  New 

York $1,396,000  00 

Investments  in  miscellaneous  securities  of  the  City 

of  New  York  (See  Schedule  "  B  ") 1 , 760,000  00 

Investments  in  serial  bonds  of  the  City  of  New 

York  (See  Schedule  "  B  ") 700,000  00 

Investments  in  corporate  stock  notes  of  the  City 

of  New  York,  issued  in  anticipation  of  the  sale 

of  corporate  stock  (See  Schedule  "  B  ") 12,430,000  00 

*Investm.ents  of  the  sinking  fund  for  the  redemp- 
tion of  city  debt  (No.  1  purchased) 6,675,780  67 

*Redemptions   of  corporate   stock   held  by   the 

sinking  fund  for  the  redemption  of  City  Debt 

No.  1 230,686  78 

Accrued  interest  on  corporate  stock  purchased  as 

investment 6, 456  76 

Installments  of  rapid  transit  rentals  paid  to  this 

account  in  1919  in  error 40,248  52 

These    disbursements    in    connection    with    the 

balance  of  cash  on  hand.  December  31,  1920,  of         173,765  09 


Aggregated  the  sum  of 23,412,937  82 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  159 

Rapid  Transit  Sinking  Fund  of  the  City  of  New  York 
The  cash  balance  of  this  account  on  January  1,  1920, 

was $39,079  46 

To  this  was  added  during  the  year,  cash  receipts  as 
follows : 

Annual  installment  for  1920  tax  budget $1 ,225,000  00 

Revenue  from  investments 262,709  33 

Moneys  received  from  the  city  treasury  on  account 
of  the  redemption  of  its  obligations  as  held  for 
investments  by  this  fund  (See  Schedule  "A") .  .  300,000  00 
*Rapid  transit  installments  paid  to  this  fund  by 
the  Sinking  Fund  of  the  City  of  New  York 
which  were  paid  to  that  fund  in  the  year  1919 

in  error 40,248  52 

Interest  en  balance  of  sinking  fund  bank  deposits  1,400  15 

1,829,358  00 


This  make  a  total  for  the  year $1 , 868 , 437  46 

Out  of  which  there  were  disbursements  as  follows: 
Investments  in  corporate  stock  notes  of  the  City 
of  New  York  issued  in  anticipation  of  the  sale 

of  corporate  stock  (See  Schedule  "  B  ") $555,942  73 

Investments  in  corporate  stock  of  the  City  of  New 

York  (See  Schedule  "  B  ") 1,303,000  00 

These    disbursements    in    connection    with    the 

balance  of  cash  on  hand  December  31,  1920,  of  9,494  73 


Aggregated  the  sum  of 1,868,437  46 

Water  Sinking  Fund  of  the  City  of  New  York 
The  cash  balance  of  this  account  on  January  1,  1920, 

was $108, 948  08 

To  this  was  added  during  the  year,  cash  receipts  as 

follows: 

Moneys  received  from  the  city  treasury  on  account 
of  the  redemption  of  its  obligations  as  held  for 
investments  by  the  fund  (See  Schedule  "A") .  .  $4,500,000  00 

Revenue  from  investments 820,030  78 

Interest  on  balances  cf  sinking  fund  bank  deposits  8,930  02 

5,328,960  80 

This  makes  a  total  for  the  year $5,437,908  88 

Out  of  which  there  were  disbursements  in  cash  as 

follows: 
Investments  in  miscellaneous  bends  of  the  City 

of  New  York  (See  Schedule  "  B  ") $600,000  00 

Investments  in  corporate  stock  notes  of  the  City 

of  New  York  issued  in  anticipation  of  the  sale 

of  corporate  stock  (See  Schedule  "  B  ") 700,000  00 

*Redemption  of  corporate  stock  held  by  the  public     4, 012 , 1 10  00 
*Redemption    of   corporate   stock   held   by   the 

Sinking  Fund  of  the  City  of  New  York 25,000  00 

These    disbursements    in    connection    with    the 

balance  of  cash  on  hand  December  31,  1920,  of         100,798  88 


Aggregated  the  sum  of 5,437,908  88 


160       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

Sinking  Fund  of  the  City  of  Brooklyn 
The  cash  balance  of  this  account  on  January  1,  1920, 

was $129,832  43 

To  this  was  addei  during  the  year  cash  receipts  as 

follows: 
Bonds  and  mortgages,  East  Side  Parkland: 

Principal $3,024  00 

Interest 2,019  20 

Moneys  received  from  the  city  treasury  en  account 
of  the  redemption  of  its  obligations  as  held  for 
investments  by  this  fund  (See  Schedule  "A") .  .         700,316  96 
Prospect  Park  improvement: 

Installments 191  04 

Interest  on  installments 89  77 

Revenue  from  investments 289,616  34 

Interest  on  balances  of  sinking  fund  bank  deposits  3,537  61 

998,794  92 


This  makes  a  total  for  the  year $1, 128,627  35 

Out  of  which  there  were  disbursements  6f  cash  as 

follows : 
Investments  in  corporate  stock  notes  of  the  City 

of  New  York  issued  in  anticipation  of  the  sale 

of  corporate  stock  (See  Schedule  "  B)" $250,000  03 

Investments  in  tax  notes  of  the  City  of  New  York 

(S3e  Schedule  "  B  ") 250,000  00 

Investments  in  serial  bonds  of  the  City  of  New 

York  (See  Schedule  "  B  ") 400,000  00 

Redemption  of  corporate  stock  held  by  the  public  95,000  00 

These    disbursements    in    connection    with    the 

balance  of  cash  on  hand  December  31,  1920,  of         133,627  35 

Aggregated  the  sum  of 1,128,627  35 


Water  Sinking  Fund  of  the  City  of  Brooklyn 

The  cash  balance  of  this  account  on  January  1,  1920, 

was $44,438  62 

To  this  was  added  during  the  year  cash  receipts  as 

follows: 

Moneys  received  from  the  city  treasury  on  account 
of  the  redemption  of  its  obligations  as  held  for 
investments  by  this  fund  (See  Schedule  "A") .  .   $1,500,000  00 
Surplus  water  rents  from  water  revenue,  borough 

of  Brooklyn 3,284,445  70 

Revenue  from  investments 196,041  40 

Interest  on  balances  of  sinking  fund  bank  deposits  10, 299  49 

4,990,786  59 


This  makes  a  total  for  the  year $5 , 035 , 225  21 

Out  of  which  there  were  disbursements  in  cash  as 

follows: 
Investments  in  corporate  stock  of  the  City  of 

New  York  (See  Schedule  "  B  ") $600,000  00 

Investments  in  serial  bonds  of  the  City  of  New 

York  (See  Schedule  "  B  ") 425,000  00 

Investments  in  miscellaneous  bonds  of  the  City 

of  New  York  (See  Schedule  "  B  ") 400,000  00 

Investments  in  corporate  stock  notes  of  the  City 

of  New  York  issued  in  anticipation  of  the  sale 

of  corporate  stock  (See  Schedule  "  B  ") 3,490,000  00 

Purchases  from   the  public   of  New  York   city 

securities 74,605  00 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  161 

Accrued  interest  on  bonds  purchased  from  the 

public $1,054  95 

These  disbursements  in  connection  with  the 
balance  of  cash  on  hand  December  31,  1920,  of  44,565  26 

Aggregated  the  sum  of $5,035,225  21 

Sinking  Fund  of  the  Long  Island  City  for  the  Redemption  of  Fire  Bonds 
The  cash  balance  of  this  account  on  January  1,  1920, 

was $11,656  54 

To  this  was  added  during  the  year  cash  receipts  as 
follows: 

Revenue  from  investments $690  00 

Interest  on  balances  of  sinking  fund  bank  deposits  239  98 

929  98 


This  makes  a  total  for  the  year $12,586  52 

There  were  no  expenditures  from  this  fund  during 

the  year  1920. 
The  cash  balance  on  hand  December  31,  1920,  was  $12,586  12 

The  general  method  of  making  transfers  between  funds,  at  least 
as  regards  all  of  the  largest  of  those  transfers,  has  been  uniform 
in  the  years  prior  to  1920  as  far  back  as  1903,  in  which  year 
charter  authority  was  granted  to  the  acquiring  of  general  fund 
bonds.  For  example,  the  annual  transfers  from  the  interest 
sinking  fund  account  to  the  No.  1  account  corresponding  with 
the  item  of  $13,300,000  in  1920  are  found  to  have  been  as 
follows:  ' 

Year  Amount 

1898  $2,500,000  00 

1899  1,500,000  00 

190-0 1,500,000  00 

1901 3,000,000  00 

1902  4,750,000  00 

1903  4,515,000  00 

1904  4,300,000  00 

1905  4,950,000  00 

1906 5,650,000  00 

1907  7,450,000  00 

1908  8,000,000  00 

1909  9,250,000  00 

1910  9,000,000  00 

1911  8,000,000  00 

1912  7,000,000  00 

1913  11,250,000  00 

6 


162  INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

Year  Amount 

1914  11,700,000  00 

1915  10,650,000  00 

1916 9,700,000  00 

1917  *11,300,000  00 

1918    11,250,000  00 

1919    11,250,000  00 


EXHIBIT  «  J  ?: 

Hon.  SCHUYLER  M.  MEYER,  Chairman, 
Hon.  ELON  K  BROWN,  Chief  Counsel, 

New    York   State   Legislative    Committee   to   Investigate 
Affairs  of  the  City  of  New  York: 

DEAR  SIRS. —  The  problem  of  providing  a  proper  system  of 
sounder  amortization  of  the  city's  bonds  held  by  the  public  is  the 
most  serious  problem  arising  from  the  city's  funded  debt.  A 
tabulation  of  all  the  maturities  from  1922  to  1967,  inclusive, 
shows  that  these  were  of  record  by  the  city  as  outstanding  debt, 
on  December  31,  1920,  in  the  aggregate  sum  of  $914,441,412.68. 

These  issues  were  put  out  without  any  attempt  to  average  the 
maturities  by  years.  The  borrowings  were  not  required  in  the 
course  of  a  long  and  uniform  spreading  out  of  constructive  or 
other  needs,  necessitating  the  issue  of  about  so  many  bonds  in 
each  of  several  years.  The  single  project  of  rapid  transit  piled 
up  a  huge  obligation  needing  to  be  met  years  hence,  but  no  better 
apportioned  to  the  fiscal  opportunities  of  those  future  years  than 
to  present  a  series  of  balances  (at  least  as  now  outstanding)  of: 

Maturities  1954  to  1960,  inclusive 427  millions 

Maturities  1961 no  maturities 

Maturities  1962  to  1967,  inclusive 307  millions 

734  millions 

or  about  80  per  cent  of  the  entire  914  millions,  and  this  80  per 
cent  calling  for  redemption  in  the  14  years  beginning  with  1954. 
No  redemptions  are  to  occur  in  1931,  1938,  1939,  1943,  1944, 
1945,  1946  and  1947. 


*  This  amount  includes  an  item  of  $800,000.00  which  is  an  Investment  in  Rapid 
Transit  Railroad  Note  No.  2026,  purchased  by  the  Sinking  Fund  for  the  payment  of 
interest  on  the  City  Debt  from  the  Sinking  Fund  for  the  Redemption  of  City  Debt 
No.  1. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  163 

Furthermore  the  operations  of  sinking  fund  purchases  of  the 
city's  own  securities  have  had,  and  as  long  as  continued  must 
always  have,  the  effect  of  constantly  disarranging  the  quantities 
of  oncoming  annual  redemption  of  publicly  held  bonds. 

It  is  manifest  that  with  but  70  millions  of  debt  coming  due 
between  1922  and  1936,  and  62  millions  coming  due  between 
1937  and  1951,  some  fair,  sound,  business-like  scheme  of  amortiza- 
tion is  needed  to  provide  for  the  enormous  demands  which  may 
be  made  upon  the  city's  treasury  within  the  few  years  to  follow 
the  middle  of  the  present  century,  and  which  will  be  made  unless 
there  are  large  refunding  operations. 

Such  a  scheme  is  available  and  is  herein  presented.  It  com- 
bines four  main  features,  viz. : 

First. —  A  fixed  sum  of  annual  contributions,  subject  to  no 
variation  whatever  until  1967,  save  as  the  compounding  interest 
rate  of  5  per  cent  on  sinking  fund  investments  may  prove  to  be 
slightly  above  or  below  the  average  money  rate  for  such  invest- 
ments throughout  the  entire  period. 

Second. —  It  automatically  rises  by  gradual  steps,  i.  e.y  accre- 
tions of  unused  balances,  year  by  year,  to  a  peak  of  279  millions 
of  dollars  in  the  fund  by  1953,  and  descends  to  a  negligible  sum 
left  over,  at  the  end  of  1967,  amounting  to  less  than  $30,000. 

Third. —  The  annual  installment  to  be  raised,  $42,800,000  an- 
nually, is  a  less  sum  than  the  aggregates  of  simple  debt,  plus 
interest  on  unpaid  debt,  in  21  of  the  46  years  beginning  with 
1922,  and  in  fact  less  than  the  amount  of  the  city's  needs  to 
redeem  bonds  and  pay  interest  during  that  first  year,  1922,  to  wit, 
$44,343,103.64. 

Fourth. —  The  accumulation  of  interest  on  sinking  fund  bal- 
ances during  the  46  years,  figured  at  5  per  cent,  or  made  equal 
to  that  rate  of  income  by  budgetary  adjustment  in  any  year  in 
which  there  might  be  a  surplus  or  deficiency,  is  an  aggregate 
income  of  no  less  than  $234,543,352.56,  all  of  which  except  an 
odd  $29,000  of  final  surplus  may  be  made  applicable  to  the  re- 
tirement of  a  volume  of  debt  now  ev^eeding  nine  hundred  millions 
of  dollars. 

In  support  of  the  plan  a  tabulation  is  appended  hereto  show- 
ing the  details,  year  by  year.  Of  its  seven  columns  the  first  three, 
showing  (1)  debt  to  be  met,  (2)  decreasing  volumes  of  interest, 
and  (3)  the  total  burden  of  each  year,  will  he  found  to  be  self- 


164       INVESTIGATION  OF  AFFAIES  OF  NEW  YOEK  CITY 

explanatory.  To  these  charges,  in  a  fourth  column,  is  added 
(4)  the  average  cost  of  meeting  payments  at  different  periods 
within  each  year.  The  fifth,  sixth  and  seventh  columns  are  of 
the  nature  of  credits,  i.  e.,  respectively,  (5)  the  values  of  $42,- 
800,000  contributed  at  the  beginning  of  each  year  and  invested 
at  5  per  cent  until  the  end  of  that  year,  (6)  the  increment  at  the 
same  rate  of  interest  on  unexpended  balances,  and  (7)  the  balances 
themselves,  at  the  end  of  each  year,  cleared  of  redemptions,  in- 
terest charges,  and  carrying  charges  (averaged)  on  the  disburse- 
ment of  interest, 

These  figures  are  offered  as  a  fair  general  statement  of  condi- 
tions, prepared  on  an  actuarial  basis.  We  believe  that  this  method 
can  be  availed  of  as  the  solution  of  one  of  New  York  city's  most 
compelling  problems.  If  sinking  funds  are  hereafter  created,  in 
respect  of  new  debt,  the  same  plan  may  be  applied  or  serial  bonds 
issued  without  sinking  funds  at  approximately  balanced  dates  of 
maturity. 

The  raising  of  the  fixed  annual  contributions  for  amortization 
purposes  should  be  mandatory,  varied  by  no  surpluses  or  de- 
ficiencies except  as  the  5  per  cent  compounding  interest  rate  might 
be  found  to  vary.  The  character  of  investments  should  be  care- 
fully restricted,  but  with  such  restrictions  the  city  may  safely 
and  confidently  avail  itself  of  the  plan.  It  provides  the  utmost 
of  protection  to  the  bondholders ;  it  relieves  the  inequalities  which 
now  imperil  fiscal  safety  in  future  years,  when  vast,  wholly  un- 
classified obligations  will  need  to  be  faced ;  it  is  a  method  in  accord 
with  the  principles  of  such  business  foresight  as  is  exercised  by 
the  largest  corporations,  notably  banks,  insurance  companies,  and 
many  other  organizations  which  need  to  take  a  forward  look  at 
large  problems  demanding  scientific  provision  for  debt  service, 
based  on  the  strictest  of  amortization. 

Very  respectfully  yours, 

PEKINE  &  NICHOLS. 
New  York,  N.  Y.,  September  9,  1921. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE 


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166       INVESTIGATION  OF  AFFAIBS  OF  NEW  YORK  CITY 


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REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  167 

EXHIBIT  "  K  " 

Memorandum  by  Counsel  for  the  Joint  Legislative  Committee  on 

the  Constitutional  Limitation  of  the  Taxing  Power  of  the  City 

of  New  York 

The  2  per  cent  tax  limit  is  fixed  and  determined  by  the  valua- 
tion of  the  real  and  personal  estate  of  the  city  as  shown  hy  the 
last  or  1920  assessment  rolls,  and  not  as  shown  by  the  1921  assess- 
ment rolls.  The  city  has  therefore  in  1921  exceeded  the  pre- 
scribed tax  limit  by  $20,000,000. 

This  proposition  is  supported  in  Emerson,  et  al.f  constituting 
the  Board  of  Education  of  the  City  of  Buffalo  v.  Buck,  et  al., 
constituting  the  Council  of  the  City  of  Buffalo,  230  K  Y.  380, 
decided  by  the  Court  of  Appeals  March  1,  1921. 

The  controversy  arose  between  the  City  Council  and  the  Buffalo 
Board  of  Education.  The  demands  of  the  Board  of  Education 
coupled  with  the  requirements  of  other  departments  of  the  city 
government  would  have  increased  the  budget  beyond  the  consti- 
tutional tax  limit  provided  that  limit  was  fixed  by  the  valuation 
of  the  preceding  year.  The  assessment  for  the  current  year  1920 
had  been  raised  about  $50,000,000,  and  if  the  limit  was  applicable 
to  such  assessment,  the  city  had  abundant  taxing  power  to  meet 
all  the  demands  made  by  the  board.  The  case  was  one  for  man- 
damus. Distinguished  counsel  were  employed  on  both  sides,  and 
adopted  without  controversy  the  assessment  of  the  prior  year 
as  the  measure  of  the  tax  limit.  The  Court  of  Appeals  in  its 
opinion  adopted  this  rule,  and  applied  it  in  making  its  decision. 
The  case  is  therefore  on  all  four  with  the  question  as  presented 
in  New  York. 

The  proposition  is  supported  by  reason  as  well  as  by  authority. 

This  provision  in  the  constitution  was  adopted  in  1884  by 
article  8,  section  11,  and  now  appears  in  section  10  of  article  8, 
and  reads  as  follows :  "  The  amount  hereafter  to  be  raised  by 
tax  for  county  or  city  purposes  in  any  county  containing  a  city 
of  over  one  hundred  thousand  inhabitants  or  any  such  city  of 
this  State,  in  addition  to  providing  for  the  principal  and  interest 
of  existing  debt,  shall  not  in  the  aggregate  exceed  in  any  one  year 
two  per  centum  of  the  assessed  valuation  of  the  real  and  personal 
estate  of  such  county  or  city,  to  be  ascertained  as  prescribed  in 
this  section  in  respect  to  county  or  city  debt." 

The  provision  referred  to  "  in  this  section  in  respect  to  county 
or  city  debt"  reads  "No  county  or  city  shall  be  allowed  to  be- 


168       INVESTIGATION  OF  AFFAIBS  OF  NEW  YORK  CITY 

come  indebted  for  any  purpose  or  in  any  manner  to  an  amount 
which  including  existing  indebtedness  shall  exceed  ten  per  centum 
of  the  assessed  valuation  of  the  real  estate  of  such  county  or  city, 
subject  to  taxation  as  it  appeared  by  the  assessment  rolls  of  said 
county  or  city  on  the  last  assessment  for  state  or  county  taxes 
prior  to  the  incurring  of  such  indebtedness/' 

Applying  the  language  of  the  latter  provision  to  the  former, 
the  provision  would  read,  "  The  amount  hereafter  to  be  raised  by 
tax  for  county  or  city  purposes  in  any  county  containing  a  city 
of  over  one  hundred  thousand  inhabitants,  or  any  such  city  of  this 
State,  in  addition  to  providing  for  the  principal  and  interest  of 
existing  debt,  shall  not  in  the  aggregate  exceed  in  any  one  year 
two  per  centum  of  the  assessed  valuation  of  the  real  and  personal 
estate  of  such  county  or  city  [to  be  ascertained  as  prescribed  in 
this  section  in  respect  to  county  or  city  debt]  subject  to  taxation 
as  it  appeared  by  the  assessment  rolls  of  said  county  or  city  on 
the  last  assessment  for  State  or  county  taxes  prior  thereto/' 

The  plain  meaning  of  this  language  is  that  the  limitation  is 
as  to  the  assessment  of  taxes  in  the  preceding  year. 

(a)  The  assessment  rolls  referred  to  are  not  the  assessment 
rolls  in  the  course  of  preparation  by  the  tax  department,  for  use 
in  assessing  the  State  or  county  taxes,  but  they  are  the  complete 
assessment  rolls  "  of  said  city  on  the  last  assessment  for  state  or 
county  taxes  prior  thereto/'  after  such  assessment  or  levy  is  made 
by  the  Board  of  Aldermen.  It  cannot  be  said  that  there  was  an 
assessment  for  'State  and  county  taxes  when  the  assessment  rolls 
of  1921  were  prepared  and  delivered  to  the  Board  of  Aldermen. 
It  is  true  that  the  real  and  personal  estate  of  the  city  had  been 
set  down  in  the  assessment  rolls,  and  those  assessment  rolls  deliv- 
ered to  the  Board  of  Aldermen  for  the  purpose  of  assessing  or 
levying  the  taxes,  but  it  cannot  be  said  that  such  rolls  of  1921 
were  the  rolls  "  on  the  last  assessment  for  state  or  county  taxes 
prior  thereto"  at  the  time  the  city  tax  of  1921  was  levied. 

Assessment  rolls  are  not  completed  until  the  tax  is  extended, 
and  the  extension  is  not  finally  completed  until  the  warrant  is 
signed  fixing  the  levy,  as  the  board  may  change  or  correct  the 
extension  of  the  tax  until  the  warrant  is  issued,  when  it  passes 
beyond  their  jurisdiction.  Under  existing  statutes  this  must  be 
done  by  March  28th.  When  the  said  levy  was  made  in  March, 
the  last  assessment  for  State  or  county  taxes  was  the  assessment 
of  1920  and  not  the  assessment  of  1921,  and  the  reference  is, 
therefore,  to  the  rolls  of  1920  and  not  to  the  rolls  of  1921. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  169 

The  word  "  assessment "  clearly  means  the  completed  assess- 
ment or  levy,  and  not  uncompleted  assessment  rolls  submitted  to 
the  aldermen  who  extend  and  levy  the  tax,  and  the  reference  is 
not  to  incomplete  but  to  complete  assessment  rolls. 

(b)  The  limitation  should  be  construed  to  refer  to  an  assess- 
ment for  State  and  county  purposes  in  the  preceding  year.      It 
will  be  noted  that  the  tax  imposed  cannot   "  in  the  aggregate 
exceed  in  any  one  year  two  per  centum  of  the  assessed  valuation 
of  the  real   and   personal  estate  of  such  county  or  city  as  it 
appeared  by  the  assessment  rolls  of  said  county  or  city  on  the 
last  assessment  for  state  or  county  taxes."      The  year  referred 
to  is  a  calendar  year.      When  a  levy  of  city  taxes  is  to  be  made, 
the  test  to  be  applied  is,  "  Will  such  tax  with  prior  taxes  in  the 
same  year  exceed  two  per  cent  ?  "      If  so,  it  is  prohibited.      It  is 
not  a  reasonable  interpretation  of  the  provision  to  refer  it  to  the 
assessment  of  State  or  county  taxes  levied  during  such  year,  since 
it  is  the  "  aggregate  "  of  city  taxes  for  the  year  which  is  referred 
to  3  former  assessment.      If  it  does  not  refer  to  the  prior  year, 
the  following  situation  might  arise:      The  city  might  levy  two 
taxes  in  the  same  year,  one  before  and  one  after  the  levying  of 
the  State  and  county  taxes  for  that  year.      It  is  intolerable  that 
a  tax  levy  by  the  city  should  ever,  in  any  contingency,  depend 
for  its  validity  upon  an  assessment  for  State  or  county  taxes  made 
after  such  city  tax  was  levied.      The  levy  of  the  first  city  tax  in 
such  a  case  would  have  a  constitutional  limit  in  the  assessment 
for  State  or  county  taxes  for  the  preceding  year,  and  the  later 
levy  would  have  a  constitutional  limitation  based  on  the  same 
year.      It  is  equally  intolerable  that  such  a  limit  on  the  first  levy 
during  the  year  by  the  city  should  be  a  different  and  other  limit 
than  the  limit  on  a  second  levy  by  the  city  in  the  same  year, 
made  after  the  State  and  county  taxes  were  levied  for  that  year; 
or  that  the  limit  should  be  one  figure  for  part  of  the  year,  and 
another  figure  for  another  part  of  the  same  year.      It  cannot  be 
that  the  framers  of  the  Constitution  intended  to  make  the  limita- 
tion of  2  per  cent  in  the  aggregate  in  any  one  year  depend  upon 
the  statutory  calendar  for  levying  taxes  of  that  year,  or  upon  a 
levy  of  State  or  county  taxes  during  the  year. 

(c)  The  language  of  the  amendment  "  as  it  appeared  "  by  the 
assessment  rolls  on  the  last  assessment  of  State  or  county  taxes 
refers  to  a  past  event,  not  to  a  concurrent  event.      Had  it  referred 
to  the  assessment  rolls  on  which  the  tax  for  1921  was  levied,  the 


170       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

language  would  have  been  in  the  present  tense,  and  not  in  the 
past  tense.  It  would  then  have  read  "  as  it  appears  "  instead  of 
reading  "  as  it  appeared." 

It  must  be  borne  in  mind  that  the  levy  of  the  city  taxes  is  not 
necessarily  made  at  the  same  time  as  the  levy  of  the  State  and 
county  taxes.  As  this  is  statutory,  and  the  statute  could  provide 
for  the  levy  of  the  city  taxes  in  January  and  the  levy  of  State 
and  county  taxes,  not  in  March  or  April,  but  in  any  other  month 
down  to  December,  it  is  clear  that  if  the  State  taxes  were  levied 
in  December,  and  the  city  taxes  in  any  preceding  month,  the 
limitation  of  2  per  cent  would  be  on  the  assessment  rolls  used 
in  levying  the  last  State  and  county  taxes.  The  levy  is  now 
made  concurrently,  at  the  same  time,  to  wit,  on  March  28th, 
and  the  limitation  as  to  city  taxes  is  2  per  cent  of  the  real  and 
personal  estate  as  it  appeared  by  the  assessment  rolls  on  the  "  last 
assessment  "  for  State  or  county  taxes.  This  language  is  not 
apt  to  describe  the  assessment  rolls  on  which  the  tax  for  State 
and  county  purposes,  and  for  city  purposes,  is  concurrently  levied. 
The  levy  is  limited  by  what  appeared  at  a  previous  assessment, 
and  not  by  what  appears  at  a  present  assessment.  The  present 
assessment  is  not  a  past  event  and  the  reference  is  clearly  to  a 
past  event.  The  Board  of  Aldermen  being  ready  to  levy  the 
tax  must  consult  the  "  last  assessment  for  state  and  county  taxes  " 
to  find  the  limitation  on  their  power  to  levy  and  not  to  the  assess- 
ment for  State  and  county  taxes  they  are  about  to  levy. 

(d)  The  city  authorities  have  to  be  advised  of  the  limit  of  the 
city's  capacity  to  incur  expense  within  the  2  per  cent  limit  during 
the  period  prior  to  the  assessment.  The  city  expenditures  for 
which  the  year's  taxes  provide,  are  going  on  for  three  months 
before  the  assessment  is  made.  In  fact  the  budget  is  adopted  by 
the  Board  of  Estimate  five  months  before  the  assessment,  or  by 
November  1st  of  the  preceding  year.  It  cannot  be  that  the  city 
is  to  make  up  its  tax  budget  or  incur  expense  without  reference 
to  this  limitation  until  the  assessment  is  completed  later  in  the 
year.  Nor  can  the  city  have  one  limitation,  namely,  on  the 
assessment  of  the  preceding  year  until  the  new  assessment  is  made, 
and  then  change  the  limitation  to  the  new  assessment,  having  two 
limitations  in  the  same  year.  The  new  assessment  might  be  less 
than  the  assessment  of  the  former  year.  The  limitation  must  be 
one  and  invariable,  and  if  the  new  assessment  shows  a  smaller 
tax  roll,  the  tax  will  still  be  justified  if  not  more  than  2  per  cent 
of  the  assessment  roll  of  the  preceding  year. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  171 

The  importance  of  this  suggestion  was  greater  under  the  char- 
ter of  the  City  of  New  York  as  it  stood  at  the  time  the  constitu- 
tional amendment  of  1884  was  adopted  than  now.  Then  the 
assessment  was  not  made  until  July,  and  as  statutes  in  force  at 
the  time  may  be  considered  in  the  interpretation  of  a  constitu- 
tional enactment,  regard  will  be  had  to  the  law  and  practice  pre- 
vailing at  the  time. 

It  has  been  suggested  that  the  purpose  of  the  Constitution  was 
to  limit  the  levy  to  2  per  cent  of  the  assessment  roll.  This  sug- 
gestion would  be  stronger  if  it  were  not  for  the  fact  that  the  2 
per  cent  limitation  is  in  addition  to  providing  for  the  interest 
and  principal  of  the  existing  debt.  The  limitation  is,  therefore, 
never  2  per  cent,  but  2  per  cent  plus  the  interest  and  principal 
of  debt.  I  think  the  more  reasonable  construction  is  that  the 
limitation  when  fixed  had  to  be  an  arbitrary  one,  and  2  per  cent 
was  fixed  as  that  arbitrary  limit.  The  basis  of  the  tax  on  which 
the  2  per  cent  was  levied  had  also  to  be  arbitrary,  and  that  was 
fixed  as  the  last  assessment  for  State  or  county  taxes.  I  there- 
fore see  nothing  in  the  provision  which  connects  the  2  per  cent 
with  the  valuation  in  the  year  in  which  the  tax  is  levied. 

EXHIBIT    "  L  " 

Memorandum  by  Counsel  for  the  Joint  Legislative  Committee 
on  the  Constitutional  Limitations  of  the  Debt  Incurring 
Power  of  the  City  of  New  York. 

The  Constitution  does  not  warrant  the  exclusion  of  $120,000,000 
of  dock  and  rapid  transit  bonds  for  general  purposes,  as  appears 
in  the  comptroller's  debt  limit  statement.  The  exclusion  can  be 
made  for  a  specific  purpose  only,  and  the  debt  incurring  power 
of  the  city  is  increased  for  no  other  purpose.  Except  for  a 
special  purpose,  the  excluded  bonds  as  well  as  the  debt  incurred 
after  their  exclusion  must  be  treated  as  a  part  of  the  debt  of 
the  city  in  determining  its  debt  limit. 

The  limitations  are  all  contained  in  section  10,  article  8,  of 
the  Constitution,  as  amended  in  1909,  a  copy  of  which  is  hereto 
annexed,  with  the  italic  type  showing  the  amendments  then  made. 
A  further  amendment  was  made  in  1917  to  exclude  the  water 
debt  in  cities  of  the  first  class  other  than  the  City  of  New  York, 
but  in  no  way  changing  the  limitations  as  to  New  York.  The 
section  has  grown  out  of  section  9,  article  8,  of  the  Constitution 
of  1846,  which  was  amended  as  section  11,  article  8,  in  1874 


172       INVESTIGATION  OF  AFFAIRS  OF  NEW  YOKE:  CITY 

and  1884,  and  as  section  10,  article  8,  in  1894,  1899,  1903  and 
1907.  The  clause  under  discussion  in  the  amendment  of  1909 
reads : 

(1)  "  and  except  further  that  any  debt  hereafter  incurred 
by  the  city  of  New  York  for  a  public  improvement  owned 
or  to  be  owned  by  the  city,  which  yields  to  the  city  current 
net  revenue,  after  making  any  necessary  allowance  for  repairs 
and  maintenance  for  which  the  city  is  liable,  in  excess  of 
the  interest  on  said  debt  and  of  the  annual  instalments  neces- 
sary for  its  amortization  may  be  excluded  in  ascertaining  the 
power  of  said  city  to  become  otherwise  indebted,  provided 
that   a  sinking  fund  for  its  amortization  shall  have  been 
established  and  maintained  and  that  the  indebtedness  shall 
not  be  so  excluded   during  any  period  of  time  when  the 
revenue  aforesaid  shall  not  be  sufficient  to  equal  the  said 
interest  and  amortization  instalments ;  " 

(2)  "  and  except  further  that  any  indebtedness  hereto- 
fore incurred  by  the  city  of  New  York  for  any  rapid  transit 
or  dock  investment  may  be  so  excluded  proportionately  to 
the  extent  to  which  the  current  net  revenue  received  by  said 
city  therefrom  shall  meet  the  interest  and  amortization  instal- 
ments thereof,  provided  that  any  increase  in  the  debt  incur- 
ring power  of  the  city  of  New  York  which  shall  result  from 
the  exclusion  of  debts  heretofore  incurred  shall  be  available 
only  for  the  acquisition  or  construction  of  properties  to  be 
used  for  rapid  transit  or  dock  purposes.      The  legislature 
shall  prescribe  the  method  by  which  and  the  terms  and  con- 
ditions under  which  the  amount  of  any  debt  to  be  so  excluded 
shall  be   determined,   and  no   such  debt   shall  be  excluded 
except  in  accordance  with  the  determination  so  prescribed. 
The   legislature   may   in   its   discretion   confer   appropriate 
jurisdiction  on  the  appellate  division  of  the  supreme  court 
in  the  first  judicial  department  for  the  purpose  of  deter- 
mining the  amount  of  any  debt  to  be  so  excluded." 

The  city  could  thus  increase  its  debt-incurring  power  for  dock 
and  rapid  transit  construction  (but  for  no  other  purpose)  by 
the  exclusion  of  self-supporting  past  indebtedness  incurred  for 
these  purposes.  The  test  would  then  be,  if  the  city  exceeded  its 
normal  debt-incurring  power,  whether  the  excess  over  such  normal 
limit  was  in  fact  incurred  for  docks  and  rapid  transit. 

The  purpose  of  the  enactment  of  1909,  briefly  stated,  was  to 
enable  the  city  to  increase  its  debt-incurring  power,  by  excluding 


IXEPOET  OF  JOINT  LEGISLATIVE  COMMITTEE  173 

from  the  city  debt  self-supporting  investments  whether  in  docks, 
rapid  transit  or  other  municipal  income  paying  enterprises.  But 
while  conferring  this  power,  extraordinary  precautions  were  taken 
against  increasing  the  debt-incurring  power  for  investments  in 
enterprises  that  were  not  self-supporting. 

(a)  By  providing, 

"And  except  further  that  any  debt  hereafter  incurred 
by  the  city  of  .New  York  for  a  public  improvement  owned 
or  to  be  owned  by  the  city,  which  yields  to  the  city  current 
net  revenue,  after  making  any  necessary  alloivanee  for 
repairs  and  maintenance  for  which  the  city  is  liable,  in 
excess  of  the  interest  on  said  debt  and  of  the  annual  install- 
ments necessary  for  its  amortization  may  be  excluded  in 
ascertaining  the  power  of  said  city  to  become  otherwise 
indebted,  provided  that  a  sinking  fund  for  its  amortization 
shall  have  been  established  and  maintained  and  that  the 
indebtedness  shall  not  be  so  excluded  during  any  period  of 
time  when  the  revenue  aforesaid  shall  not  be  sufficient  to 
equal  the  said  interest  and  amortization  installments/' 

The  exemption  ceases  to  be  effective  as  soon  as  the  enterprise 
ceases  to  be  self-supporting,  or  requires  the  imposition  of  a  tax 
on  the  city. 

(b)  By  providing, 

"  and  except  further  that  any  indebtedness  heretofore 
incurred  by  the  city  of  New  York  for  any  rapid  transit  or 
dock  investments  may  be  so  excluded  proportionately  to  the 
extent  to  which  the  current  net  revenue  received  by  said 
city  therefrom  shall  meet  the  interest  and  amortization 
installments  thereof,  provided  that  any  increase  in  the  debt 
incurring  power  of  the  city  of  Neiv  York  which  shall  result 
from  the  exclusion  of  debts  heretofore  incurred  shall  be 
available  only  for  the  acquisition  or  construction  of  prop- 
erties to  be  used  for  rapid  transit  or  dock  purposes." 

The  city  has  assumed  that  by  making  an  expenditure  equal 
to  such  excluded  bonds,  the  exclusion  becomes  complete  for  all 
purposes ;  or,  stated  in  another  way,  that  after  adding  to  the  city 
debt  by  expending  $120,000,000  in  nonself-supporting  municipal 
enterprises  (principally  rapid  transit)  it  was  also  entitled,  in 
determining  its  debt-incurring  power,  to  deduct  for  all  purposes 
the  bonds,  excluded  by  the  Appellate  Division  for  a  single  pur- 


174:       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

pose,  and  treat  them  as  exempt  like  water  bonds.  The  effect  of 
this  process  has  been  to  increase  the  city's  debt-incurring  power 
for  all  purposes,  and  so  of  course  for  other  purposes  than  docks 
or  rapid  transit,  beyond  what  it  was  before  the  constitutional 
enactment. 

Of  course,  but  for  this  amendment  both  the  bonds  excluded 
for  past  indebtedness  and  the  new  expenditure  for  rapid  transit 
and  docks  would  have  been  computed  as  a  part  of  the  debt.  The 
terms  of  the  enactment  show  that,  except  in  the  case  of  docks 
and  rapid  transit,  it  was  intended  that  both  of  such  expenditures 
should  still  be  computed  as  part  of  the  debt  unless  the  new 
expenditure  came  under  clause  (1)  and  became  totally  exempt 
because  it  was  self-supporting. 

The  suggestion  is  made  that  the  failure  to  thus  increase  the 
debt-incurring  power,  for  other  purposes  than  dock  and  rapid 
transit,  would  cripple  the  city  financially.  The  answer  is  that 
it  was  the  plain  intention  to  do  so,  unless  the  city  keeps  within 
the  constitutional  limitations  imposed.  The  10  per  cent  limit 
was  so  intended,  as  were  the  carefully  imposed  restrictions  in  per- 
mitting certain  exceptions  to  this  limit,  including  the  provision 
that  exemptions  for  self-supporting  enterprises  will  be  lost  or 
suspended  if  and  while  they  cease  to  be  self-supporting.  Neither 
of  these  provisions  is  more  drastic  than  the  rule  laid  down  as 
applicable  to  all  cities  that  "  all  indebtedness  in  excess  of  such 
limitations  except  such  as  now  may  exist,  shall  be  absolutely  void 
except  as  herein  otherwise  provided.  No  county  or  city  whose 
present  indebtedness  exceeds  ten  per  centum  of  the  assessed  valua- 
tion of  its  real  estate  subject  to  taxation,  shall  be  allowed  to 
become  indebted  to  any  further  amount  until  such  indebtedness 
shall  be  reduced  within  such  limit.''  The  purpose  of  these  limita- 
tions is  clearly  set  forth  by  Judge  Finch  in  the  case  of  Rochester 
v.  Quintard,  136  N.  Y.  221,  where  it  is  said: 

et  The  obvious  theory  of  the  constitutional  provision  is 
that  the  smaller  cities  of  the  state  needed  but  one  restraint 
and  that  relating  to  the  purpose  and  occasion  of  their  indebt- 
edness, and  not  to  its  amount.  Such  cities  were  not  likely, 
with  their  smaller  necessities  to  make  large  loans  and  con- 
tract heavy  debts,  and  so  were  left  without  restriction  upon 
amounts  or  terms,  save  such  as  the  citizens  might  themselves 
impose.  But  the  larger  cities,  with  their  greater  needs  and 
the  pressure  of  much  more  numerous  non-taxpayers,  and 
their  swarm  of  claimants  on  the  public  treasury,  did  need 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE 

restraint,  not  only  as  to  the  purposes  of  the  municipal  indebt- 
edness, but  as  to  its  amount;  and  so  the  restriction  in  that 
respect  also  was  imposed;  and  yet,  to  prevent  a  greater  evil 
which  might  result,  and  open  the  door  to  a  necessity  of  the 
gravest  character,  it  was  enacted  that  even  that  restraint 
should  not  bar  the  further  issue  of  bonds  for  a  water  supply ; 
but  since  these  would  add  to  a  debt  already  crowded  to  the 
extreme  limit  of  prudence  and  safety,  it  was  provided  that 
such  added  debt  should  run  for  a  moderate  term  of  credit 
and  be  guarded  by  a  sinking  fund  so  as  to  reduce  to  the 
lowest  reasonable  point  the  continuance  and  menace  of  the 
debt  already  too  large.  The  city  which  availed  itself  of  the 
exceptional  permission  could  do  so  only  upon  the  conditions 
which  were  attached  with  a  view  to  making  the  added  debt 
as  little  harmful  as  possible.  Of  course,  the  line  between 
the  smaller  and  the  larger  cities,  those  which  did  not  and 
those  which  did  call  for  a  limit  of  permitted  debt,  had  to  be 
drawn  somewhat  arbitrarily,  and  was  fixed  as  the  most 
reasonable  test  capable  of  application." 

It  does  not  seem  to  have  occurred  to  the  city  authorities  that 
the  city  could  easily  relieve  itself  of  all  embarrassment  arising 
from  these  limitations  by  ceasing  to  roll  up  a  huge  indebtedness, 
which  it  has  no  intention  of  meeting,  except  by  renewal  or  by 
substitute  obligations  greater  in  amount  than  the  debt  redeemed. 

It  may  relieve  itself  of  any  embarrassment  from  the  situation 
thus  arising  in  several  ways,  some  of  which  do  not  involve  the 
painful  suggestion  of  part  payment  of  the  debt.  As  an  illustra- 
tion and  considering  the  situation  as  of  January  1,  1921,  when 
10  per  centum  of  the  assessed  valuation  of  the  real  estate  was 
$862.000,000,  and  as  such  the  measure  of  the  debt-incurring 
power  of  the  city;  if  we  assume  that  the  city  at  that  time  had 
incurred  indebtedness  to  the  full  measure  of  $862,000,0-00,  and 
had  also  expended  $120,000,000  for  docks  and  rapid  transit  under 
the  exclusion  of  a  like  amount  by  the  Appellate  Division  for  that 
specific  purpose,  the  city  would  then  have  reached  its  debt  limit 
on  docks  and  rapid  transit  and  be  over  the  debt  limit  for  all  other 
purposes  in  the  amount  of  $120,000,000. 

It  could  be  relieved  of  its  embarrassment  in  three  ways: 

1.  It  could  pay  $120,000,000  in  bonds,  whether  dock,  rapid 
transit  or  other  bonds,  and  be  restored  to  its  financial  condition 
of  solvency  or  zero,  and  no  longer  be  over  the  debt  limit. 


176       INVESTIGATION  OF  AFFAIRS  OF  NEW  YOKK  CITY 

2.  It  could  increase  its  assessment  more  than  a  billion  dollars, 
as  it  has  done  in  the  last  year,  and  thus  restore  its  financial  con- 
dition to  solvency  or  zero,  and  no  longer  be  over  the  debt  limit. 

3.  It  could  make  the  dock  and  rapid  transit  investment  self- 
sustaining.     Such  investment  would  then  immediately  come  under 
the  first  clause  of  the  constitutional  amendment  of  1909,  and  as 
a  self-sustaining  investment  hereafter  made,  become  an  exempt 
debt  for  all  purposes.      The  city  would  thus  be  restored  to  finan- 
cial solvency  for  general  purposes  or  to  zero. 

It  is  true  that  the  city  would  not  in  any  of  these  supposed  cases 
have  further  debt-incurring  power,  except  for  docks  or  rapid 
transit,  until  it  had  further  increased  its  resources  by  another 
step  in  one  of  the  ways  suggested,  but  being  square  with  the 
world,  it  would  be  in  a  position  to  seek  and  obtain  further 
resources  according  to  its  needs  and  capacities. 

It  may  be  further  remarked : 

(A)  The  increase  in  the  debt-incurring  capacity,  arising  from 
the    exclusion    for    a    specific   purpose   only,    of   past    indebted- 
ness, would  not  have  been  exhausted  by  the  expenditure  of  the 
$120,000,000  for  rapid  transit  and  docks,  had  such  investments 
been  made  self-sustaining,  for  in  that  case  the  new  investment 
would  immediately  have  become  exempt  and  deducted  from  the 
total  indebtedness  of  the  city.      The  city  would  then  have  been 
in  a  position  to  invest  another  $120,000,000  in  docks  and  rapid 
transit  and  if  it  was  self-sustaining  and  so  within  the  terms  of 
the  first  clause  of  the  amendment,  suffer  no  loss  of  debt-incurring 
power  from  the  transaction,  and  the  process  could  be  indefinitely 
repeated. 

The  potential  increase  in  the  debt-incurring  capacity  arising 
from  the  exclusion  of  past  indebtedness  incurred  for  dock  or  rapid 
transit,  cannot,  in  view  of  the  refusal  to  include  such  indebted- 
ness for  any  other  purpose,  be  effective  until  the  debt  limit  for 
other  purposes  is  reached.  It  is  not  an  exception  as  in  the  case 
of  water  bonds,  but  an  exclusion,  when  the  debt  limit  is  computed, 
for  docks  and  rapid  transit  only,  and  is  a  continuing  increase  in 
the  debt-incurring  power  for  docks  and  rapid  transit  so  long  as 
and  as  often  as  the  new  investment  becomes  self-sustaining. 

(B)  The  objection  that  such  a  construction  would  deprive  the 
city  of  all  debt-incurring  power  and  thus  prevent  it  from  making 
expenditures  for  necessary  municipal  purposes,  is  without  force. 
The    provision   was   enacted    in    contemplation    of   the   possible 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  177 

exhaustion  of  the  debt-incurring  power  by  the  new  investments 
if  they  were  not  self-sustaining.  At  the  same  time  this  was 
enacted  (as  of  January  1,  1910)  the  provision  for  special  revenue 
bonds  was  enacted  which  provides  that  the  10  per  cent  limit 
shall  not  prevent  the  City  of  New  York  from  issuing  bonds  to 
be  redeemed  out  of  a  tax  levy  next  succeeding  the  year  of  their 
issue  "  provided  the  amount  of  such  bonds  which  may  be  issued 
in  any  one  year  in  excess  of  the  limitations  herein  contained, 
shall  not  exceed  one-tenth  of  one  per  centum  of  the  assessed  valua- 
tion of  the  real  estate  of  said  city,  subject  to  taxation." 

ISTo  limit  was  placed  on  special  revenue  bonds  until  the  city 
had  otherwise  reached  its  debt  limit,  and  then  they  were  reduced 
to  one-tenth  of  1  per  cent.  This  was  clearly  enacted  with  refer- 
ence to  the  complete  exhaustion  of  the  city's  debt-incurring  power. 
The  whole  section  bristles  with  warnings  against  the  exhaustion 
of  the  debt-incurring  power  and  visits  the  remedy  on  the  offender. 

(C)  That  such  is  the  true  construction  is  apparent  from  the 
omission  in  the  constitutional  amendment  of  1909  of  a  require- 
ment for  a  sinking  fund  for  debt  incurred  for  rapid  transit  or 
docks  by  reason  of  the  exclusion  of  previous  investment  in  docks 
and  rapid  transit,  the  only  requirement  being  in  such  case  that 
the  exclusion  for  the  special  purpose  shall  be  limited  "  propor- 
tionately to  the  extent  to  which  the  current  net  revenue  received 
by  said  city  therefrom  shall  meet  the  interest  and  amortization 
installments  thereof."  The  provision  suspending  the  exclusion 
during  a  period,  if  any,  when  the  sinking  fund  was  not  main- 
tained, or  the  revenue  was  not  sufficient  to  equal  the  interest  and 
amortization  installments,  applicable  to  expenditure  hereafter 
made  was  not  here  repeated.  A  sufficient  check  against  a  non- 
self-supporting  investment  was  provided  in  the  resulting  loss  of 
debt-incurring  power,  and  in  the  means  opened  to  the  city  of 
relieving  itself  of  such  loss  by  the  provision  under  the  first  clause 
exempting  such  debts  completely  where  they  were  self-sustaining. 

Both  clauses  must  be  construed  together,  and  the  constitutional 
purpose  apparent  in  both  enforced.  It  is  reductio  ad  absurdum 
to  conclude  that  as  to  indebtedness  hereafter  incurred  for  revenue 
producing  improvements,  the  city  will  be  charged  with  the  full 
amount  in  limitation  of  its  debt-incurring  power,  if  adequate 
provision  be  not  made  and  maintained  for  interest  and  amortiza- 
tion requirements  from  such  revenues,  and  that  the  limitation 
will  be  revived  if  there  is  a  temporary  suspension  of  the  self- 
support  ;  but  that  the  city  can  incur  at  will,  indebtedness  to  the 


178       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

full  amount  of  bonds  excluded  for  a  specific  purpose  only,  with- 
out any  such  check  or  any  check  whatever.  Each  provision  sup- 
ports the  other.  The  investment  under  the  excluded  bonds  would 
tide  the  city  over  the  period  of  construction.  If  the  city  was 
unwilling  to  reduce  its  debt-incurring  capacity  by  the  new  debt 
it  could  be  relieved  under  clause  (1)  by  making  it  self-sustaining 
either  by  the  terms  of  the  original  investment  or  by  increasing 
the  revenue  from  its  operation. 

A  good  deal  of  confusion  arises  from  the  use  in  the  debt  limit 
statements  of  the  word  "  exempt "  in  connection  with  past  invest- 
ments in  docks  and  rapid  transit.  No  such  word  occurs  in  the 
Constitution.  The  word  there  used  is  "  exclude  "  or  "  excluded," 
and  the  exclusion  in  case  of  expenditures  hereafter  made  is  for 
general  purposes  and  complete  and  may  properly  be  described 
as  exempt.  In  the  case  under  consideration,  that  is,  for  expendi- 
ture heretofore  made,  the  exclusion  is  for  a  special  purpose  only, 
and  not  to  be  made  use  of  for  any  other  purpose,  and  therefore 
not  exempt.  The  argument  that  the  city  was  enabled  by  this  con- 
stitutional provision  to  add  to  its  debt  by  an  unproductive  invest- 
ment without  suffering  a  limitation  of  its  debt-incurring  power,  is 
not  only  in  conflict  with  the  specific  amendment  made  in  1909,  but 
with  the  general  scope  and  purpose  of  the  constitutional  provisions 
limiting  the  indebtedness  of  cities.  It  is  against  the  spirit  of  the 
Constitution,  destructive  of  the  limitations  it  imposes  for  the 
protection  not  only  of  the  city,  but  of  the  State,  and  has  been 
conceived  along  lines  too  common  in  the  City  of  New  York  of 
finding  some  way  to  get  the  money  without  regard  to  consequences. 

The  conception  that  the  exclusion  of  the  rapid  transit  and  dock 
bonds  was  for  all  purposes,  whether  a  like  amount  was  expended 
for  a  like  purpose  or  not,  first  appears  in  the  debt  limit  statement 
of  the  Comptroller  of  December  31,  1910.  The  conception  that 
the  expenditure  for  docks  and  rapid  transit  was  to  be  allocated 
to  the  bonds  excluded,  .first  appears  in  the  debt  limit  statement  of 
December  31,  1911.  This  later  view  manifestly  did  not  obtain 
when  the  statement  of  December  31,  1910,  was  made  up,  as 
several  million  dollars  were  expended  for  docks  and  rapid  transit 
between  the  date  of  the  order  of  exclusion  and  the  making  of  the 
statement.  The  absence  of  this  statement  of  fact  demonstrates 
that  that  claim  had  not  then  taken  shape.  Later  debt  limit  state- 
ments made  before  the  expenditure  of  the  full  amount  of  the 
excluded  bonds  give  the  margin  for  "  Rapid  Transit  only,"  and 
the  margin  for  "  Various  municipal  purposes  "  separately.  This 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  179 

statement  is  misleading  as  "  Various  municipal  purposes " 
included  docks  and  rapid  transit,  and  every  dollar  of  the  debt- 
incurring  power,  however  derived,  and  whether  normal  or  extraor- 
dinary, was  available  for  rapid  transit  and  docks ;  but  the  impres- 
sion is  given  that  "  various  municipal  purposes "  does  not 
include  docks  and  rapid  transit. 

The  theory  is  now  boldly  put  forth  that  the  city  is  entitled  to 
the  exemption  of  the  bonds  excluded,  for  all  purposes,  because 
of  the  expenditure  of  moneys  equal  in  amount  to  the  dock  and 
rapid  transit  bonds  excluded.  The  error  springs  from  the  con- 
ception that  the  expenditure  for  docks  and  rapid  transit  came 
out  of  a  special  fund  created  by  the  exclusion  of  the  bonds  before 
the  debt  limit  was  reached;  and  that  the  increase  in  the  debt- 
incurring  power  was  thus  available  for  this  purpose  before  the 
normal  debt-incurring  power  was  exhausted.  But  the  city  could 
not  avail  itself  of  an  increase  in  the  debt-incurring  power  for  a 
special  purpose  before  the  normal  debt-incurring  power  for  all 
purposes  was  exhausted.  It  could  not  reserve  its  normal  debt- 
incurring  power  and  exhaust  the  increase  for  a  special  purpose. 
It  is  like  attempting  to  consume  the  residue  or  remainder  before 
consuming  the  major  part,  or  taking  a  journey  from  New  York 
to  San  Francisco  and  running  first  from  Denver  to  Salt  Lake  City. 
The  debt-incurring  power  is  one  power,  both  before  and  after  its 
increase,  and  its  exhaustion  proceeds  as  debt  is  incurred.  The 
normal  limit  may  be  reached  by  indebtedness  for  any  purpose, 
including  docks  and  rapid  transit,  and  when  reached  the  extraor- 
dinary limit  or  increased  debt-incurring  power  can  be  availed 
of  for  docks  and  rapid  transit  only.  If  its  extraordinary  or 
increased  debt-incurring  power  be  so  exercised,  it  will  be  at  the 
expense  of  the  debt-incurring  power  for  every  purpose,  and  the 
limitation  so  created  will  remain  until  the  debt  is  reduced  below 
the  normal  constitutional  debt  limitation. 

The  conclusion  is,  that  the  city  has  been  over  the  debt  limit 
much  of  the  time  for  ten  years.  By  reason  of  the  billion  dollar 
increase  in  the  assessment,  it  now  has  a  margin  of  $17,000,000 
which  may  be  increased  in  the  several  ways  suggested  in  this 
paper.  If  the  conclusion  here  reached  is  ignored,  the  city  will 
exercise  a  debt-incurring  power  of  $137.000,000,  which  with 
present  demands  on  the  treasury  is  not  likely  to  last  through 
another  calendar  year.  There  is  no  limit  to  the  exhaustion  of 
the  city's  credit  except  the  Constitution. 


180       INVESTIGATION  OF  AFFAIRS  OF  NEW  YOKK  CITY 

Limitation    of    Indebtedness    of    Counties,    Cities,    Towns    and 
Villages;  Exception  as  to  City  of  New  York 

[Constitution,  Art.  VIII,  Sec.  10,  as  amended  Nov.  2,  1909.] 
,No  county,  city,  town  or  village  shall  hereafter  give  any  money 
or  property,  or  loan  its  money  or  credit  to  or  in  aid  of  any 
individual,  association  or  corporation,  or  become  directly  or 
indirectly  the  owner  of  stock  in,-  or  bonds  of,  any  association  or 
corporation;  nor  shall  any  such  county,  city,  town  or  village  be 
allowed  to  incur  indebtedness  except  for  county,  city,  town  or 
village  purposes.  This  section  shall  not  prevent  such  county, 
city,  town  or  village  from  making  such  provision  for  the'  aid  or 
support  of  its  poor  as  may  be  authorized  by  law.  No  county 
or  city  shall  be  allowed  to  become  indebted  for  any  purpose  or  in 
any  manner  to  an  amount  which,  including  existing  indebtedness, 
shall  exceed  ten  per  centum  of  the  assessed  valuation  of  the  real 
estate  of  such  county  or  city  subject  to  taxation,  as  it  appeared 
by  the  assessment  rolls  of  said  county  or  city  on  the  last  assess- 
ment for  State  or  county  taxes  prior  to  the  incurring  of  such 
indebtedness;  and  all  indebtedness  in  excess  of  such  limitation, 
except  such  as  now  may  exist,  shall  be  absolutely  void,  except  as 
herein  otherwise  provided.  No  county  or  city  whose  present 
indebtedness  exceeds  ten  per  centum  of  the  assessed  valuation  of 
its  real  estate  subject  to  taxation,  shall  be  allowed  to  become 
indebted  in  any  further  amount  until  such  indebtedness  shall  be 
reduced  within  such  limit.  This  section  shall  not  be  construed 
to  prevent  the  issuing  of  certificates  of  indebtedness  or  revenue 
bonds  issued  in  anticipation  of  the  collection  of  taxes  for  amounts 
actually  contained,  or  to  be  contained  in  the  taxes  for  the  year 
when  such  certificates  or  revenue  bonds  are  issued  and  payable 
out  of  such  taxes;  nor  to  prevent  the  city  of  New  York  from 
issuing  bonds  to  be  redeemed  out  of  the  tax  levy  for  the  next  year 
succeeding  the  year  of  their  issue,  provided  that  the  amount  of 
such  bonds  which  may  be  issued  in  any  one  year  in  excess  of  the 
limitations  herein  contained  shall  not  exceed  one-tenth  of  one 
per  centum  of  the  assessed  valuation  of  the  real  estate  of  said  city 
subject  to  taxation.  Nor  shall  this  section  be  construed  to  pre- 
vent the  issue  of  bonds  to  provide  for  the  supply  of  water;  but 
the  term  of  the  bonds  issued  to  provide  the  supply  of  water,  in 
excess  of  the  limitation  of  indebtedness  fixed  herein,  shall  not 
exceed  twenty  years,  and  a  sinking  fund  shall  be  created  on  the 
issuing  of  the  said  bonds  for  their  redemption,  by  raising  annually 


REPOKT  OF  JOINT  LEGISLATIVE  COMMITTEE  181 

a  sum  which  will  produce  an  amount  equal  to  the  sum  of  the 
principal  and  interest  of  said  bonds  at  their  maturity.      All  cer- 
tificates of  indebtedness  or  revenue  bonds  issued  in  anticipation 
of  the  collection  of  taxes,  which  are  not  retired  within  five  years 
after  their  date  of  issue,  and  bonds  issued  to  provide  for  the  supply 
of  water,  and  any  debt  hereafter  incurred  by  any  portion  or  part 
of  a  city,  if  there  shall  be  any  such  debt,  shall  be  included  in 
ascertaining  the  power  of  the  city  to  become  otherwise  indebted; 
except  that  debts  incurred  by  the  city  of  New  York  after  the 
first   day  of   January,   nineteen   hundred   and  four,    and   debts 
incurred  by  any  city  of  the  second  class  after  the  first  day  of 
January,  nineteen  hundred  and  eight,  and  debts  incurred  by  any 
city  of  the  third  class  after  the  first  day  of  January,  nineteen  hun- 
dred and  ten,  to  provide  for  the  supply  of  water,  shall  not  be  so 
included ;  and  except  further  that  any  debt  hereafter  incurred  by 
the  city  of  Neiv  York  for  a  public  improvement  owned  or  to  be 
owned  by  the  city,  which  yields  to  the  city  current  net  revenue, 
after  making  any  necessary  allowance  for  repairs  and  mainte- 
nance for  which  the  city  is  liable,  in  excess  of  the  interest  on  said 
debt  and  of  the  annual  instalments  necessary  for  its  amortization 
may  be  excluded  in  ascertaining  the  power  of  said  city  to  become 
otherwise  indebted,  provided  that  a  sinking  fund  for  its  amor- 
tization shall  have  been  established  and  maintained,  and  that  the 
indebtedness  shall  not  be  so  excluded  during  any  period  of  time 
when  the  revenue  aforesaid  shall  not  be  sufficient  to  equal  the 
said  interest  and  amortization  instalments,  and  except  further 
that  any  indebtedness  heretofore  incurred  by  the  city  of  New  York 
for  any  rapid  transit  or  dock  investment  may  be  so  excluded  pro- 
portionately to  the  extent  to  which  the  current  net  revenue  received 
by  said  city  therefrom  shall  meet  the  interest  and  amortization 
instalments  thereof,  provided  that  any  increase  in  the  debt-incur- 
ring power  of  the  city  of  New  York  which  shall  result  from  the 
exclusion  of  debts  heretofore  incurred  shall  be  available  only  for 
the  acquisition  or  construction  of  properties  to  be  used  for  rapid 
transit  or  dock  purposes.     The  Legislature  shall  prescribe  the 
method  by  which  and  the  terms  and  conditions  under  which  the 
amount  of  any  debt  to  be  so  excluded  shall  be  determined,  and 
no  such  debt  shall  be  excluded  except  in  accordance  with  the 
determination  so  prescribed.     The   Legislature  may  in  its  dis- 
cretion confer  appropriate  jurisdiction  on  the  Appellate  Division 
of  the  Supreme  Court  in  the  first  judicial  department  for  the 
purpose  of  determining  the  amount  of  any  debt  to  be  so  excluded. 


182       INVESTIGATION  OF  AFFAIES  OF  NEW  YORK  CITY 

No  indebtedness  of  a  city  valid  at  the  time  of  its  inception  shall 
thereafter  become  invalid  by  reason  of  the  operation  of  any  of 
the  provisions  of  this  section.  Whenever  the  boundaries  of  any 
city  are  the  same  as  those  of  a  county,  or  when  any  city  shall 
include  within  its  boundaries  more  than  one  county,  the  power 
of  any  county  wholly  included  within  such  city  to  become  indebted 
shall  cease,  but  the  debt  of  the  county,  heretofore  existing,  shall 
not,  for  the  purposes  of  this  section,  be  reckoned  as  a  part  of  the 
city  debt.  The  amount  hereafter  to  be  raised  by  tax  for  county 
or  city  purposes,  in  any  county  containing  a  city  of  over  one 
hundred  thousand  inhabitants,  or  any  such  city  of  this  state,  in 
addition  to  providing  for  the  principal  and  interest  of  existing 
debt,  shall  not  in  the  aggregate  exceed  in  any  one  year  two  per 
centum  of  the  assessed  valuation  of  the  real  and  personal  estate 
of  such  county  or  city,  to  be  ascertained  as  prescribed  in  this 
section  in  respect  to  county  or  city  debt. 

EXHIBIT    "M" 

Analysis  Showing  the  Number  of  Voters  in  Selected  Election 
Districts  Who  Own  Real  Estate  Therein  and  Pay  Taxes 
Thereon,  as  Compared  with  Those  Who  Do  Not 

BOROUGH  OF  MANHATTAN 

7  Assembly  District  24  Election  District 

Total  number  of  voters  in  district 580 

Voters  in  district  paying  taxes  on  real  estate 61 

7  A.  D.  30  E.  D. 

Total  number  of  voters  in  district 341 

Voters  in  district  paying  taxes  on  real  estate 15 

19  A.  D.  20  E.  D. 

Total  number  of  voters  in  district 417 

Voters  in  district  paying  taxes  on  real  estate 4 

19  A.  D.  23  E.  D. 

Total  number  of  voters  in  district 527 

Voters  in  district  paying  taxes  on  real  estate 2 

2  A.  D.  15  E.  D. 

Total  number  of  voters  in  district 494 

Voters  in  district  paying  taxes  on  real  estate 1 

BOROUGH   OF   RICHMOND 

1  Assembly  District  7  Election  District 

Total  number  of  voters  in  district 285 

Voters  in  district  paying  taxes  on  real  estate 4 


v 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  183 

1  A.  D.  19  E.  D. 

Total  number  of  voters  in  district 307 

Voters  in  district  paying  taxes  on  real  estate 51 

1  A.  D.  13  E.  D. 

Total  number  of  voters  in  district 415 

Voters  in  district  paying  taxes  on  real  estate 45 

2  .4.  D.  22  E.  D. 

Total  number  of  voters  in  district 534 

Voters  in  district  paying  taxes  on  real  estate 62 

A.  D.  E.  D. 

Total  number  of  voters  in  district 497 

Voters  in  district  paying  taxes  on  real  estate 57 

BOROUGH  OF  BROOKLYN 

5  Assembly  District                        6  Election  District 
Total  number  of  voters  in  district 480 

pters  in  district  paying  taxes  on  real  estate 53 

21  A.  D.  28  E.  D. 

Total  number  of  voters  in  district 331 

Voters  in  district  paying  taxes  on  real  estate 7 

6  A.  D.  12  E.  D. 

Total  number  of  voters  in  district 510 

Voters  in  district  paying  taxes  on  real  estate 61 

6  A.  D.  2  E.  D. 

Total  number  of  voters  in  district 517 

Voters  in  district  paying  taxes  on  real  estate 18 

6  A.  D.  28  E.  D. 

Total  number  of  voters  in  district 461 

Voters  in  district  paying  taxes  on  real  estate 20 


BOROUGH    OF    BUONX 

7  Assembly  District  20  Election  District 

Total  number  of  voters  in  district 569 

Voters  in  district  paying  taxes  on  real  estate 10 

7  A.  D.  23  E.  D. 

Total  number  of  voters  in  district 644 

Voters  in  district  paying  taxes  on  real  estate 16 

7  A.  D.  25  E.  D. 

Total  number  of  voters  in  district 577 

Voters  in  district  paying  taxes  on  real  estate 20 

7  A.  D.  1  E.  D. 

Total  number  of  voters  in  district 512 

Voters  in  district  paying  taxes  on  real  estate 14 


FIFTH  REPORT 


REPORT  AND  SUMMARY  OF  EVIDENCE  CONCERNING 

MANDATORY    LEGISLATION,  DEPARTMENTS    OF 

POLICE,  LICENSES,  MARKETS  AND 

PUBLIC  WELFARE 


[185] 


REPORT  AND  SUMMARY  OF  EVIDENCE  CONCERNING 

MANDATORY   LEGISLATION,   DEPARTMENTS  OF 

POLICE,  LICENSES,  MARKETS  AND 

PUBLIC  WELFARE 


March  14,  1922. 
To  the  Legislature  and  the  Charter  Revision  Commission: 

The  New  York  State  Joint  Legislative  Committee  to  Investi- 
gate the  Affairs  of  the  City  of  New  York  submits  herewith  a 
report  and  summary  of  the  evidence  dealing  with  certain  admin- 
istrative phases  of  the  municipal  and  county  governments,  as 
follows : 

1.  Mandatory  Legislation  Affecting  the  City  of  New  York. 

2.  The  Administration  of  the  Police  Department. 

(a)  Political  Interference  with  Police  Administration. 

(b)  Illegal  Police  Reinstatements. 

(c)  Demoralization  of  the  Quartermaster's  Division. 

(d)  1918  Police  Games. 

(e)  Speculation  and  Money  Making  by  Police  Officials. 

3.  Department  of  Licenses  —  Division  of  Licensed  Vehicles. 

4.  Department  of  Markets. 

5.  Department  of  Public  Welfare  —  Kings  County  Hospital 
Job. 

In  the  first  report  of  the  Committee,  dated  December  19,  1921, 
we  recommended  the  repeal  of  all  mandatory  legislation.  The 
first  subdivision  of  this  report  analyzes  in  detail  the  mandatory 
laws  affecting  the  city.  The  other  subdivisions  of  this  report 
summarize  briefly  the  evidence  adduced  by  the  Committee  con- 
cerning some  of  the  more  conspicuous  failures  of  the  city  admin- 
istration to  furnish  to  the  citizens  of  New  York  an  honest  and 
efficient  government. 

Respectfully  submitted, 

SCHUYLER  M.  MEYER, 

Chairman. 

THEODORE  D.  ROBINSON, 
MAXWELL  S.  HARRIS, 
FREDERICK  W.  KAVANAUGH, 
SIMON  L.  ADLER, 
SOL  ULLMAN, 
WALTER  W.  WESTALL, 
JOHN  R.  YALE, 
THEODORE  STITT. 

[187] 


MANDATORY    LEGISLATION    AFFECTING    THE     CITY 

OF  NEW  YORK 


Appropriations  Which  Are  Completely  Mandatory. 

A  study  of  the  effect  of  mandatory  legislation  upon  the  budget 
for  1921  shows  that  of  the  $112,289,980.61  appropriated  for  per- 
sonal service  from  the  Tax  Levy  Budget  of  that  year  $59,502,- 
062.80  or  52.9  per  cent  represented  mandatory  appropriations 
which  could  not  be  increased  or  decreased  by  the  budget  makers, 
either  because  the  exact  amount  was  fixed  by  law  or  because  the 
power  of  fixation  was  conferred  upon  officers  other  than  the 
budget  makers.  In  this  connection,  however,  it  should  be  noted 
that  in  many  instances  the  budget  makers  have  provided  salaries 
in  excess  of  the  mandatory  rates. 

A  list  of  these  mandatory  positions  is  set  forth  in  the  attached 
Exhibits  1,  2  and  4.  These  exhibits  contain  the  citation  of  the 
law  which  compelled  each  of  the  appropriations. 

Prevalence  of  Mandatory  County  Legislation. 

Mandatory  legislation  has  concerned  itself  particularly  with 
fixation  of  county  salaries.  Of  the  $8,102,975.82  appropriated 
for  personal  service  in  county  offices  for  1921  $6,226,532.27,  or 
76.8  per  cent  was  mandatory  as  above  defined  (see  Exhibits  1 
and  2).  The  prevalence  of  mandatory  county  legislation  may  be 
explained  in  part  by  the  fact  that  the  Mayor  has  no  veto  power 
over  bills  affecting  counties  within  the  city  of  New  York.  It  is 
doubtless  also  due  in  part  to  the  fact  that  county  officials  have  no 
representation  upon  the  Board  of  Estimate.  On  the  other  hand, 
the  heads  of  so-called  "  city  departments  "  and  "  borough  depart- 
ments "  have  such  representation  through  either  the  Mayor,  Comp- 
troller or  a  Borough  President  and  hence  can  more  readily  secure 
appropriation  which  they  desire. 

Items  Which  Are  Partly  Mandatory. 

It  must  not  be  assumed  that  the  remaining  47.1  per  cent  of  the 
city  budget  for  personal  service  or  the  remaining  23.2  per  cent  of 
the  appropriation  for  county  salaries  is  entirely  discretionary  with 
the  budget  makers.  On  the  other  hand  there  are  certain  classes 
of  appropriations  which  are  partly  mandatory,  as  follows :  There 

[189] 


190       INVESTIGATION  or  AFFAIRS  OF  NEW  YORK  CITY 

are  those  as  to  which  any  reasonable  necessary  expense  incurred 
must  be  paid  irrespective  of  the  amount  appropriated.  An  example 
of  this  type  is  the  appropriation  for  fees  and  commissions  for  ex- 
perts employed  by  the  District  Attorney;  (2)  There  are  those  ap- 
propriations where  the  rate  of  compensation  is  fixed  by  law  but  the 
number  of  positions  is  discretionary,  for  example,  surgeons  in  the 
Police  Department;  (3)  There  are  positions  which  are  fixed  by 
law  although  the  rate  of  pay  for  such  positions  is  discretionary. 
Examples  of  this  type  of  mandatory  legislation  are  too  frequent 
to  require  citation;  (4)  Finally,  the  maintenance  of  certain 
bureaus  or  divisions  is  frequently  required  by  law,  although  no 
specific  position  or  salary  therein  is  required,  for  example,  Charter 
provisions  specifying  what  bureaus  shall  be  maintained  in  the 
Finance  Department. 

1902  General  Repeal  of  Mandatory  Charter  Provisions. 

In  1902  by  the  enactment  of  Chapter  435  amending  Section  56 
of  the  Charter,  the  Board  of  Aldermen  was  given  power  "  to  fix 
the  salary  of  every  officer  or  person  whose  compensation  is  paid  out 
of  the  city  treasury  "  (with  certain  specific  exceptions)  "  irre- 
spective of  the  amount  fixed  by  this  act."  This  was  in  effect  the 
blanket  repealer  of  all  mandatory  salary  provisions  in  the  charter 
at  that  time.  Thus  the  salary  of  the  Mayor,  fixed  by  Charter 
Section  94  and  the  salary  of  the  Corporation  Counsel,  fixed  by 
Charter  Section  255,  are  both  discretionary  under  Charter  Sec- 
tion 56.  The  section  fixing  the  Mayor's  salary  and  the  section 
fixing  the  Corporation  Counsel's  salary  have  both  been  amended 
in  other  particulars  since  1902.  No  change  was  made  in  the  salary 
rate  however.  The  Corporation  Counsel  has  held  (see  opinion 
June  10,  1915)  that  so  long  as  the  rate  was  not  changed  it  was  the 
intention  of  the  legislature  that  the  salaries  should  still  be  subject 
to  change  by  the  Board  of  Aldermen  under  Section  56. 

Ancient  and  Obscure  Mandatory  Statutes. 

To  re-enact  today  such  a  repealer  as  that  of  1902  would  be  of 
slight  value  for  most  mandatory  statutes  are  not  part  of  the  Char- 
ter. They  are  to  be  found  in  unconsolidated  statutes,  some  dating 
back  as  far  as  1882,  unrepealed  sections  of  the  Consolidation  Act, 
various  chapters  of  the  Consolidated  Laws,  the  Codes  of  Civil 
and  Criminal  Procedure,  etc.,  etc.  For  example  the  new  New 
York  City  Court  act  contains  no  reference  to  specific  salaries, 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  191 

except  that  the  "  salaries  shall  be  fixed  as  prescribed  by  law." 
There  are,  however,  unrepealed  provisions  of  the  Consolidation 
Act  which  compel  certain  salaries  for  interpreters  and  assistant 
clerks  and  certain  other  statutes  enacted  in  1898  which  fix  the 
salaries  of  stenographers  and  clerks  in  the  city  court  (see  Ex- 
hibit 4).' 

Blanket  Repeal  of  Mandatory  Legislation  Recommended. 

Legislation  is  recommended  empowering  the  budget  makers  to 
fix  the  number  and  compensation  of  all  city  and  county  positions, 
with  certain  specific  exceptions,  irrespective  of  any  general  or 
local  law  to  the  contrary.  Two  bills  to  accomplish  this  were  intro- 
duced in  1916  by  Senator  Brown  (see  Exhibit  3  and  Exhibit  5). 
One  referred  to  city  salaries  and  the  other  to  county  salaries.  Each 
provided  for  a  referendum.  The  consensus  of  opinion  against 
mandatory  legislation  is  apparently  so  general  today  as  to  obviate 
the  necessity  of  a  referendum. 

Exhibits  1  and  2  attached  to  this  report  list  the  laws  which 
compel  particular  county  salaries  and  positions.  Positions  listed 
in  Exhibit  2  would  not  be  affected  by  the  bill  introduced  by  Sen- 
ator Brown  in  1916,  (Exhibit  3).  Such  a  law  would  make 
$5,389,025.44  of  mandatory  appropriations  discretionary  with 
the  budget  makers  and  only  $837.506.83  of  county  salaries  would 
still  remain  mandatory. 

Exhibit  4  lists  the  laws  which  compel  particular  salaries  and 
positions  in  the  city  and  borough  departments.  The  items  marked 
with  a  star  would  not  be  affected  by  Senator  Brown's  bill  of  1916 
as  finally  amended  (Senate  Print  No.  1734,  Ex.  5).  As  the 
large  item  of  teachers'  salaries  would  not  be  affected  $50,647- 
415.67  of  city  and  borough  mandatory  salaries  would  remain  man- 
datory and  only  $2,628,114.86  of  them  would  become  discretionary. 

EXHIBIT  1 

Mandatory  County  Salaries. 

The  following  table  indicates  Mandatory  County  Salaries 
which  would  become  discretionary  if  a  bill  similar  to  the  one 
attached,  Exhibit  3  (Senate  Int.  590,  Print  622,  1916),  were 
enacted. 


192       INVESTIGATION  OF  AFFAIRS  OF  XEW  YORK  CITY 


COUNTY  CLERK,  NEW  YORK  COUNTY 
Budget     Mandatory 


Position 

rate             rate                         Law 

Counsel  

$5,500        $5,000    1914,  chap.  90 

Clerk,  Common  Pleas  and  Super- 

ior Court  Records  

3,250          2,500    1896,  chap.  885 

Clerk,  Common  Pleas  and  Super- 

ior Court  Records  

3,000          2,500    1896,  chap.  885 

DISTRICT  ATTORNEY,  NEW  YORK  COUNTY 

Budget     Mandatory 

Position 

rate             rate                         Law 

Assistant  district  attorney  

$12,000      $12,000    1920,  chap.  822 

6  Assistant  district  attorneys  

7,500          7,500    1920,  chap.  822 

7  Assistant  district  attorneys  

10,000        10,000     1920,  chap.  822 

Medical  assistant  

5,500          5,500    1915,  chap.  355 

Secretary  

4,680          4,180    1918,  chap.  652 

Chief  clerk  

6,000          5,500    1918,  chap.  652 

Deputy  chief  clerk  

4,350          3,850    1918,  chap.  652 

Deputy  chief  clerk  and  auditor  . 

4,350          4,350    1918,  chap.  652 

2  Clerks  

3,250          2,750    1918,  chap.  652 

18  Clerks  

2,880          2,250    1918,  chap.  652 

3  Clerks  

2,400          2,400    1920,  chap.  728 

3  Clerks  

2,400          2,400    1920,  chap.  728 

Clerk  

2,400          2,400    1918,  chap.  652 

Law  stenographer  

3,250          2,750    1918,  chap.  652 

Chief  law  stenographer  

2,874          2,178    1918,  chap.  652 

4  Law  stenographers  

2,299          1,716    1918,  chap.  652 

5  Law  stenographers  

2,200          1,650    1918,  chap.  652 

9  Law  stenographers  

1,982          1,452    1918,  chap.  652 

3  Law  stenographers  

1,830          1,320    1918,  chap.  652 

Engineering  draftsman  and  pho- 

tographer   

2,220          1,650    1918,  chap.  652 

2  Telephone  operators  

1,449             990    1918,  chap.  652 

Chief  process  server  

2,  904          2,  000    1912,  chap.  191  and  1920, 

chap.  822 

14  Process  servers  

2,220          1,500    1912,  chap.  191,  and  1920, 

chap.  822 

7  Process  servers  

2,022          1,500    1912,  chap.  191  and  1920, 

chap.  822 

12  Process  servers  

1,956          1,500    1912,  chap.  191  and  1920, 

chap.  822 

16  Process  servers  

1  ,  830          1  ,  500    1912,  chap.  191  and  1920, 

chap.  822 

Messenger  

1,532          1,056    1918,  chap.  652 

2  Messengers  

1,351             924    1918,  chap.  652 

4  Messengers  

1,071             726    1918,  chap.  652 

3  Messengers  

800             462    1918,  chap.  652 

Librarian  

2,  500          1  ,  100    1918,  chap.  652 

Clerk  

3,250          2,750    1918,  chap.  652 

3  Clerks  

2,904          2,200    1918,  chap.  652 

Stenographer  

1,830          1,320    1918,  chap.  652 

2  Process  servers  

2,200          1,500    1912,    chap.    191;    1920, 

chap.  822 

3  Process  servers  

2,022          1,500    1912,    chap.    191;    1920, 

chap.  822 

Process  server  

1,956          1,500    1912,    chap.    191,    1920; 

chap.  822 

6  Process  servers  

1,830          1,500    1912,    chap.    191;    1920, 

chap.  822 

Messenger  

800             462    1918,  chap.  652 

REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE 


193 


COMMISSIONER  OP  RECORDS,  NEW  YORK  COUNTY 

NOTE.  —  Laws  of  1912,  chap.  167,  provide  for  a  lump  sum  mandatory  appropria- 
tion of  $100,000. 

COMMISSIONER  OP  RECORDS,  SURROGATE'S  COURT,  NEW  YORK  COUNTY 

Budget     Mandatory 

Position  rate  rate  Law 

Commissioner  ................         $7,  500      Same  1911,  chap.  534 

Deputy  commissioner  .........  6,000      Same  1911,  chap.  534 

Superintendent  ...............  5,  000      Same  1911,  chap.  534 

General  clerk  .................  3,  500      Same  1911,  chap.  534 

Clerk  .......................  2,320      Same  1911,  chap.  534 

Chief  recording  clerk  ..........  3,  000      Same  1911,  chap.  534 

7  Recording  clerks  ..............  2,  320      Same  1911,  chap.  534 

Recording  clerk  ...............  2,  100      Same  1911,  chap.  534 

6  Index  clerks  ..................  2,080      Same  1911,  chap.  534 

Index  clerk  ..................  2,080      Same  1911,  chap.  534 

Messenger  ...................  2,080      Same  1911,  chap.  534 

2  Bookbinders  .................  2,  150      Same  1911,  chap.  534 

7  Laborers  .....................  1,464      Same  1911,  chap.  534 

COMMISSIONER  OP  JURORS,  NEW  YORK  COUNTY 

Budget     Mandatory 

Position  rate  rate  Law 

Commissioner  ................         $6,  000      Same  1906,  chap.  499 

Assistant  commissioner  ........  3,800      Same  1906,  chap.  499 

Secretary  ....................  3,  800      Same  1906,  chap.  499 

Clerk  ........................  2,640      Same  1906,  chap.  499 

Clerk  ........................  2,400      Same  1906,  chap.  499 

2  Clerks,  each  ..................  2,  200      Same  1906,  chap.  499 

6  Clerks,  each  ..................  2,  076     Same  1906,  chap.  499 

9  Clerks,  each  ..................  1,  920     Same  1906,  chap.  499 

7  Messengers  (as  Notice  Server), 

each  ......................  1,  920      Same  1906,  chap.  499 

2  Messengers  (as  Notice  Server), 

each  ......................  1,823      Same  1906,  chap.  499 

2  Messengers,  each  .............  1,920  Same  1906,  chap.  499 

PUBLIC  ADMINISTRATOR,  NEW  YORK  COUNTY 

Budget     Mandatory 

Position  rate  rate  Law 

Public  administrator  ..........       $10,  000  Same  1898,  chap.  230,  §  31 

Assistant  public  administrator.  .          5,500        $5,000  1898,  chap.  230,  §  31 


SHERIFF,  NEW  YORK  COUNTY 


Position 

Under  sheriff 
15  Deputy  sheriffs 
15  Assistant  deputy  sheriffs 

Counsel 

Assistant  counsel 

Chief  clerk 


Budget     Mandatory 
rate  rate 

$6,500        $6,000 
Same 
$1,  800 


3,  500 
2,  280 
6,500 
4,000 
4,500 


Law 

1920,  chap.  565 
1920,  chap.  565 
1920,  chap.  565 
6,000  1920,  chap.  565 
3,  500  1920,  chap.  565 
4,500  1920,  chap.  565 


NEW  YORK  STATE  GUARD  AND  NAVAL  MILITIA,  NEW  YORK  COUNTY 

NOTE.  —  Wages  of  all  regular  employees  totaling  $331,055  are  mandatory  under 
Military  Law.  section  187  and  following. 

7 


194       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 


SUPREME  COURT,  FIRST  DEPARTMENT.  NEW  YORK  AND  BRONX  COUNTIES 

NOTE. —  The  salaries  and  wages  for  all  officers  and  employees,  except  the  justices, 
total  SI,  141, 600.  All  of  these  items  are  mandatory.  Under  various  sections  of  the 
Judiciary  Law  and  Education  Law,  see  particularly  Judiciary  Law,  sections  274  and 
362,  and  Education  Law,  sections  1163  and  1166. 

SUPREME  COURT,  FIRST  DEPARTMENT,  MAINTENANCE  OF  APPELLATE  DIVISION  COURT 

HOUSE,  NEW  YORK  AND  BRONX  COUNTIES 

NOTE. —  Under  Laws  1900,  chapter  490,  the  entire  appropriation  of  $34,677  for 
salaries  of  the  custodian,  engineers,  cleaners  and  all  other  employees  is  mandatory. 

COURT  OF  GENERAL  SESSIONS,  NEW  YORK  COUNTY 


Position 

Clerk 

14  Deputy  clerks 

Assistant  clerk 

9  Record  clerks 

7  Clerks  to  judge 

6  Stenographers 

Crier 

5  Interpreters 

2  Warden,  Grand  Jury 

53  Attendants 

9  Attendants 

2  Stenographers  and  typewriters. . 

Special  interpreters 

Pensions . . . 


Budget 

Mandatory 

rate 

rate 

$5,500 

$5,000 

4,500 

3,000 

4,500 

3,000 

3,500 

3,000 

4,500 

4,500 

5,040 

5,040 

3,600 

3,600 

3,500 

3,000 

2,400 

2,400 

2,500 

2,500 

2,100 

2,100 

3,000 

3,000 

240 

240 

3,000 

3,000 

Law 

1911,  chap.  526,  §  1531 
1911,  chap.  526,  §  1531 
1911,  chap.  526,  §  1531 
1920,  chap.  830 
1920,  chap.  316 

1919,  chap.  556 

1918,  chap.  590  and  591 
1918,  chap.  590  and  591 
1918,  chap.  590  and  591 

1920,  chap.  790 

1918,  chap.  648 

1919,  chap.  554 

1921,  chap.  482,  §  388 
1918,  chap.  645 


SURROGATE'S  COURT,  NEW  YORK  COUNTY 


Position 

Chief  clerk 

Deputy  chief  clerk 

Assistant  deputy  chief  clerk. . .  . 

Law  assistant : . 

2  Law  assistants 

2  Law  assistants 

Clerk  of  court 

Deputy  clerk  of  court 

Clerk,  additional  part  of  court. . 

2  Clerks  to  the  surrogate 

2  Stenographers 

Stenographer 

Stenographer 

Assistant  stenographer 

Stenographer 

Confidential  stenographer  to  the 
surrogate 

Stenographer  to  surrogate 

Interpreter 

Superintendent  of  supplies 

Probate  clerk 

First  assistant  probate  clerk .... 
2  Confidential  attendants  to  sur- 
rogate  

Second  assistant  probate  clerk . . 

Third  assistant  probate  clerk. .  . 

Administration  clerk 

First  assistant  administration 
clerk 

Second  assistant  administration 
lerk.. 


Budget 

Mandatory 

rate 

rate 

$11,000 

Same 

6,500 

Same 

4,500 

Same 

7,200 

Same 

7,000 

Same 

6,000 

Same 

6,000 

Same 

3,600 

Same 

3,600 

Same 

4,200 

Same 

4,500 

Same 

2,520 

Same 

1,830 

Same 

2,520 

Same 

1,708 

Same 

2,200 

Same 

2,200 

Same 

2,400 

Same 

3,180 

Same 

6,000 

Same 

3,180 

Same 

2,500 

Same 

2,200 

Same 

2,200 

Same 

4,500 

Same 

3,180 

Same 

2,520 

Same 

Law 

1911,  chap.  775 
1911,  chap. 775 
1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 

1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 

1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 
1911,  chap.  775 

1911,  chap.  775 
1911,  chap.  775 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE 


195 


Position 

Budget     Mandatory 
rate        rate 

Law 

Third    assistant    administration 

clerk  

2,220 

Same 

1911,  chap.  775 

Guardian  clerk  

3,000 

Smae 

1911,  chap.  775 

Assistant  guardian  clerk  

2,520 

Same 

1911,  chap.  775 

Guardian  accounting  clerk  

3,180 

Same 

1911,  chap.  775 

Assistant    accounting    guardian 

clerk  

2,220 

Same 

1911,  chap.  775 

Accounting  clerk  

3,600 

Same 

1911,  chap.  775 

Assistant  accounting  clerk  

2,850 

Same 

1911,  chap.  775 

Certificate  clerk  

2,220 

Same 

1911,  chap.  775 

Subpoena  clerk  

1,830 

Same 

1911,  chap.  775 

Requisition  clerk  

1,830 

Same 

1911,  chap.  775 

Clerk  

2,220 

Same 

1911,  chap.  775 

Special  searcher  

2,220 

Same 

1911,  chap.  775 

Correspondence  searcher  

2,220 

Same 

1911,  chap.  775 

Correspondence  searcher  

2,088 

Same 

1911,  chap.  775 

Clerk  of  records  

2,700 

Same 

1920,  chap.  702 

5  Record  clerks  

2,220 

Same 

1911,  chap.  775 

Superintendent  recording  clerks. 

2,700 

Same 

1911,  chap.  775 

Chief  examiner  

2,220 

Same 

1911,  chap.  775 

Assistant  examiner  

2,022 

Same 

1911,  chap.  775 

Recording    clerk    (photographic 

recorder)  

2,401 

Same 

1911,  chap.  775 

Recording  clerk  (assistant  photo- 

graphic recorder)  

2,100 

Same 

1911,  chap.  775 

20  Recording  clerks  

1,830 

Same 

1911,  chap.  775 

Calendar  clerk  and  superinten- 

dent of  copyists  

2.220 

Same 

1911,  chap.  775 

2  Copyists  

1,830 

Same 

1911,  chap.  775 

Librarian  and  chief  messenger  .  . 

2,820 

Same 

1911,  chap.  775 

3  Messengers  

2,820 

$2,100 

1920,  chap.  817,  \ 

\34 

6  Court  attendants  

2,500 

2,100 

1920,  chap.  817,  { 

J3~ 

Attendant  to  chief  clerk  

2,160 

2,160 

1911,  chap.  775 

Laborer  

1,445 

1,445 

1911,  chap.  775 

COUNTY  CLERK,  BRONX  COUNTY 

Budget     Mandatory 

Position 

rate 

rate 

Law 

Deputy  county  clerk  

$4,500 

$4,000 

1913,  chap.  825,  | 

13 

Assistant  deputy  county  clerk  .  . 

3,500 

3,000 

1913,  chap.  825, 

§3 

Secretary  

2,640 

2,000 

1913,  chap.  825,  j 

|3 

Counsel  

3,500 

3,000 

1913,  chap.  825,  ! 

}3 

Chief  clerk  

3,250 

2,500 

1913,  chap.  825,  | 

3 

Cashier  

3,250 

2,500 

1913,  chap.  825,  j 

3 

Notarial  clerk  

3,250 

2,500 

1913,  chap.  825,  j 

3 

Equity  clerk  

3,500 

3,000 

1913,  chap.  825,  j 

J3 

DISTRICT  ATTORNEY,  BRONX  COUNTY 


Position 

5  Assistant  district  attorneys 

3  Assistant  district  attorneys 

Deputy  ass  stant  district  attor- 
ney   

Secretary  

Chief  clerk 

Clerk  to  Grand  Jury 

2  Confidential  stenographers 

Warden  of  Grand  Jury 

Interpreter 

Messenger 

8  County  detectives 

2  Process  servers 

Stenographer  to  Grand  Jury. . .  . 


Mandatory 

rate  rate  Law 

$5,500        $5,000  1918,  chap.  632 

4,000          3,500  1918,  chap. 632 


2,880 
3,500 
4,000 
2,040 
2,400 
2,040 
2,040 
2,040 
2,040 
2,040 
3,000 


2,880 
3,000 
3,500 
1,500 
1,800 
1,500 
1,500 
1,500 
1,500 
1,500 
2,000 


1918,  chap.  632 
1918,  chap.  632 
1918,  chap.  632 
1918,  chap.  632 
1918,  chap.  632 
1918,  chap.  632 
1918,  chap.  632 
1918,  chap.  632 
1913,  chap.  825, 
1918,  chap.  632 
1918,  chap.  632 


§3 


196       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

REGISTER,  BRONX  COUNTY 
Budget     Mandatory 

Position                                    rate              rate  Law 

Deputy  register $4, 500        $4,000  1913,  chap.  825,  §  3 

Assistant  deputy  register 3,500          3,000  1913,  chap.  825,  §  3 

Land  title  examiner 4,000          2,000  1913,  chap.  825,  §  3 

Cashier 3, 250          2,500  1913,  chap.  825,  §  3 

Examiner 3,074          2,000  1913,  chap.  825,  §  3 

Secretary 3,074          2,000  1913,  chap.  825,  §  3 

Chief  clerk 3,250          2,500  1913,  chap.  825,  §  3 

COMMISSIONER  OF  JURORS,  BRONX  COUNTY 

Budget     Mandatory 

Postion                                    rate              rate  Law 

Commissioner $6,500      Same  1913,  chap.  266,  §  8 

Assistant  commissioner 3,500      Same  1913,  chap.  266,  §  8 

Secretary 3,500      Same  1913,  chap.  266,  §  8 

Chief  clerk 2,640      Same  1913,  chap.  266,  §  8 

Clerk 2, 160      Same  1913,  chap.  266,  §  8 

Clerk,    stenographer  and   type- 
writer            2,376      Same  1913,  chap.  266,  §  8 

3  Jury  notice  servers 1,848      Same  1913,  chap.  266,  §  8 

Messenger 920      Same  1913,  chap.  266,  §  8 

PUBLIC  ADMINISTRATOR,  BRONX  COUNTY 
Budget     Mandatory 

rate  rate  Law 

Public  administrator $4,500        $4,500     1913,  chap.  825,  §  3 

COMMISSIONER  OF  RECORDS,  BRONX  COUNTY 

Budget     Mandatory 

Position  rate                rate                          Law 

Commissioner $5, 500        $5, 000  1918,  chap.  90 

Deputy  commissioner 4,000          4,000  1918,  chap.  299 

Superintendent 2,520          2,520  1918,  chap.  299 

Chief  clerk 2,400          2,400  1918,  chap.  299 

Clerk 2,400          2,400  1918,  chap.  299 

3  Clerks 1,500          1,500  1918,  chap.  299 

2  Laborers 1,464          1,464  1918,  chap.  299 

Photographer 1, 825          1, 825  1918,  chap.  299 

Bookbinder 2, 150          2, 150  1918,  chap.  299 

Coypists  (temporary) 6,000  

SHERIFF,  BRONX  COUNTY 
Budget     Mandatory 
Position  rate  rate  Law 

Under  sheriff $5,500        $5,000  1913,  chap.  825,  §  3 

10  Deputy  sheriffs 3, 500          3, 500  1920,  chap.  738 

5  Assistant  deputy  sheriffs 1 , 800          1 , 800  1920,  chap.  738 

Counsel 5,000          5,000  1920,  chap.  738 

Cashier 3,500          3,500  1920,  chap.  738 

Secretary 3,000          3,000  1920,  chap.  738 

Chief  clerk 3,000          3,000  1920,  chap.  738 

NEW  YORK  STATE  GUARD  AND  NAVAL  MILITIA,  OF  BRONX  COUNTY 
NOTE. —  Wages  of  all  regular  empoyees,  totaling  $93,440,  are  mandatory  under 
Military  Law,  section  187,  and  following. 

LAW  LIBRARY,  BRONX  COUNTY 
Budget     Mandatory 

rate  rate  Law 

Librarian $2,340        $3,500    1921,  chap.  635 


REPOKT  OF  JOINT  LEGISLATIVE  COMMITTEE 


197 


SURROGATE'S  COURT,  BRONX  COUNTY 


Position 
Chief  clerk  and  clerk  of  the  court 

Probate  clerk 

Administration  clerk 

Cashier 

Attendant  and  messenger 


Budget 
rate 
$5,000 
4,500 
4,000 
3,500 
1,944 


Mandatory 
rate 


Law 

$5,000  1920,  chap.  738 
4,500  1920,  chap.  738 
4,000  1920,  chap.  738 
3,500  1920,  chap.  738 
1,944  1920,  chap.  817, 


COUNTY  COURT,  BRONX  COUNTY 


Position 

County  detective 

County  detective 

Court  stenographer 

Court  attendant 

Court  attendants 

Interpreter 

Interpreter  (temporary) 

Court  stenographer  (temporary) 


Budget  Mandatory 

rate 

rate 

Law 

$3, 

000 

$3, 

000 

1920, 

chap. 

779 

3, 

000 

3, 

000 

1920, 

chap. 

779 

4, 

200 

4, 

000 

1920, 

chap. 

818 

2, 

160 

2, 

160 

1920, 

chap. 

816, 

2, 

500 

2, 

500 

1920, 

chap. 

816, 

2, 

304 

2, 

304 

1921, 

chap. 

639 

200 

200 

1921, 

chap. 

482 

2, 

000 

2, 

000 

1921, 

chap. 

4 

COUNTY  CLERK,  KINGS  COUNTY 


Position 

Deputy  county  clerk 

Assistant  deputy  county  clerk.  . 

Counsel 

Secretary 

Expert  of  records 

Chief  of  old  records 

2  Assistant  to  chief  of  old  records 

Bookkeeper 

Cashier 

Law  clerk 

Notarial  clerk 

Clerk 

Equity  clerk  in  charge: 

Equity  clerk 

2  Equity  clerks 

Docket  clerk  in  charge 

2  Docket  clerks 

Docket  clerk 

3  Index  clerks 

Stenographer 

Document  searcher 

2  Comparers 

Clerk 

4  Clerks 

Messenger 

2  Custodians 

Laborer 

4  Copyists  (temporary) 


Budget  Mandatory 
rate      rate 
$6,000   $5,000 
3,820    2,500 

1921, 
1921, 

Law 
chap.  586 
chap.  586 

4, 

000    3,500 

1921, 

chap. 

586 

2, 

400    1,500 

1921, 

chap. 

586 

3, 

500    3,000 

1921, 

chap. 

586 

2, 

040    1,100 

1921, 

chap. 

586 

2, 

040    1,000 

1921, 

chap. 

586 

2, 

851    2,000 

1921, 

chap. 

586 

2, 

640    2,000 

1921, 

chap. 

586 

3, 

320    2,500 

1921, 

chap. 

586 

3, 

330    2,250 

1921, 

chap. 

586 

2, 

640    2,000 

1921, 

chap. 

586 

2, 

880    2,000 

1921, 

chap. 

586 

2, 

880    2,000 

1921, 

chap. 

586 

2, 

640    1,500 

1921, 

chap. 

586 

2, 

640    2,000 

1921, 

chap. 

586 

2,' 

640    1,500 

1921, 

chap. 

586 

2, 

112 

,500 

1921, 

chap. 

586 

2, 

040 

,500 

1921, 

chap. 

586 

1, 

830 

,200 

1921, 

chap. 

586 

2, 

040 

,200 

1921, 

chap.  586 

2, 

040 

,000 

1921, 

chap. 

586 

2, 

112 

,200 

1921, 

chap. 

586 

1, 

708 

,200 

1921, 

chap. 

586 

1, 

464 

800 

1921, 

chap. 

586 

1 

708 

,000 

1921, 

chap. 

586 

1, 

405 

,000 

1921, 

chap. 

586 

2, 

520    2,  160 

1921, 

chap. 

586 

DISTRICT  ATTORNEY,  KINGS  COUNTY 


Position 
Assistant  district  attorney .... 

3  Assistant  district  attorneys 

Assistant  district  attorney .... 

2  Assistant  district  attorneys 

3  Assistant  district  attorneys 

2  Assistant  district  attorneys 


•  Budget      Mandatory 

rate  rate  Law 

$10,000  Same  1920,  chap.  864 

9,000  Same  1920,  chap.  864 

8,400  Same  1920,  chap.  864 

7,500  Same  1920,  chap.  864 

6,000  Same  1920,  chap.  864 

7,500  Same  1920,  chap.  864 


348a 


198       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 


Budget 

Mandatory 

Position 

rate 

rate 

Law 

1 

District  (assistant)  attorney  

7, 

500 

Same 

1920, 

chap. 

864 

1 

Assistant  district  attorney  

6, 

500 

Same 

1920, 

chap. 

864 

Assistant  district  attorney  

6, 

000 

Same 

1920, 

chap. 

864 

Chief  clerk  

5, 

500 

$5,000 

1914, 

chap. 

468,  ( 

?3 

3 

Clerks  

2, 

640 

2,000 

1914, 

chap. 

488,  \ 

3 

2 

Clerks  

2, 

400 

2,000 

1914, 

chap. 

468,  ( 

53 

Clerk  

2, 

220 

2,000 

1914, 

chap. 

468,  * 

}3 

Clerk  

2, 

160 

2,000 

1914, 

chap. 

468, 

Stenographer  and  private  secre- 

tary   

2, 

520 

2,000 

1916, 

chap. 

187 

5 

Stenographers  and  private  secre- 

taries   

2, 

160 

2,000 

1916, 

chap. 

187 

11 

County  detectives  

2, 

160 

1,800 

1911, 

chap. 

452, 

55 

County  detective  

2, 

040 

1,800 

1911, 

chap. 

452, 

Messenger  

1, 

708 

1,200 

1914, 

chap. 

468, 

13 

Attendant  

I, 

708 

1,200 

1914, 

chap. 

468, 

§3 

REGISTER, 

KINGS  COUNTY 

Budget 

Mandatory 

Position 

rate 

rate 

Law 

Deputy  register  

$5, 

500 

Same 

1920, 

chap. 

823 

Assistant    deputy   register    and 

deputy  register  

3,850 

Same 

1920, 

chap. 

823 

Counsel  .  

3, 

850 

Same 

1920, 

chap. 

823 

Secretary  

2, 

400 

Same 

1920, 

chap. 

823 

Expert  of  records  

4, 

070 

Same 

1920, 

chap. 

823 

Land  title  examiner  

3, 

850 

Same 

1920, 

chap. 

823 

Chief  block  index  clerk  

3, 

300 

Same 

1920, 

chap. 

823 

Chief  searcher  and  examiner.  .  .  . 

3, 

600 

Same 

1920, 

chap. 

823 

Tickler  clerk  

3, 

480 

Same 

1920, 

chap. 

823 

Chief  clerk  of  copyists  

3, 

410 

Same 

1920, 

chap. 

823 

Notarial  clerk  

2, 

640 

Same 

1920, 

chap. 

823 

2 

Examiners'  assistants  

2, 

880 

Same 

1920, 

chap. 

823 

First  assistant  tickler  clerk  

2, 

616 

Same 

1920, 

chap. 

823 

Chief  current  index  clerk  

2, 

616 

Same       • 

1920, 

chap. 

823 

Chief  clerk  of  records  

2, 

616 

Same 

1920, 

chap. 

823 

Bookkeeper  

2, 

880 

Same 

1920, 

chap. 

823 

Executive  clerk  

2, 

340 

Same 

1920, 

chap. 

823 

Chattel  mortgage  clerk  

2, 

616 

Same 

1920, 

chap. 

823 

Satisfaction  clerk  

2, 

520 

Same 

1920, 

chap. 

823 

2 

Abstract  clerks  

2, 

376 

Same 

1920, 

chap. 

823 

Abstract  clerk  

2, 

280 

Same 

1920, 

chap. 

823 

Assistant  cashier  

2, 

616 

Same 

1920, 

chap. 

823 

Stenographer  

2, 

376 

Same 

1920, 

chap. 

823 

Assistant  index  clerk  

2, 

376 

Same 

1920, 

chap. 

823 

6 

Assistant  index  clerks  

2, 

160 

Same 

1920, 

chap. 

823 

Entry  clerk  

2, 

376 

Same 

1920, 

chap. 

823 

Mailing  clerk  

2, 

160 

Same 

1920, 

chap. 

823 

3 

Comparers  

2, 

376 

Same 

1920, 

chap. 

823 

Comparer  

2, 

376 

Same 

1920, 

chap. 

823 

3 

Assistant  comparers  

2, 

376 

Same 

1920, 

chap. 

823 

Assistant  notarial  clerk  

2, 

376 

Same 

1920. 

chap. 

823 

Assistant  notarial  clerk  

2, 

160 

.  Same 

1920, 

chap. 

823 

Deliverv  clerk  

2, 

232 

Same 

1920, 

chap. 

823 

Second  assistant  tickler  clerk.  .  . 

j 

980 

Same 

1920, 

chap. 

823 

Second  assistant  tickler  clerk.  .  . 

944 

Same 

1920, 

chap. 

823 

Assistant  chattel  mortgage  clerk 

i 

980 

Same 

1920, 

chap. 

823 

3 

Clerks  

2, 

088 

Same 

1920, 

chap. 

823 

6 

Clerks  

> 

980 

Same 

1920, 

chap. 

823 

Clerk  

} 

944 

Same 

1920, 

chap. 

823 

2 

Clerks  

7 

920 

Same 

1920, 

chap. 

823 

REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE 


199 


Budget     Mandatory 

Position 

rate             rate                         Law 

5  Clerks  

1,800      Same          1920,  chap.  823 

8  Clerks  

1,794      Same          1920,  chap.  823 

Clerk  

1,560      Same          1920,  chap.  823 

27  Copyists  

1,872      Same          1920,  chap.  823 

2  Copyists  

1,794      Same          1920,  chap.  823 

2  Copyists  

1,680      Same          1920,  chap.  823 

Copyist  

1,560      Same          1920,  chap.  823 

Copyist  

1,512      Same          1920,  chap.  823 

2  Copyists  

1,440      Same          1920,  chap.  823 

2  Custodians  

1,711.00  Same          1920,  chap.  823 

Custodian  

1,656      Same          1920,  chap.  823 

2  Custodians  

1,440      Same          1920,  chap.  823 

Telephone  operator  

1,680      Same          1290,  chap.  823 

7  Messengers  

1,440      Same          1920,  chap.  823 

Messenger  

1,296      Same          1920,  chap.  823 

Keeper  of  coat  room  

1,422      Same          1920,  chap  823 

COMMISSIONER 

OF  RECORDS,  KINGS  COUNTY 

Budget     Mandatory 

Position 

rate              rate                          Law 

Commissioner  

$5,000           Same          1920,  chap.  821 

Deputy  commissioner  

4,000           Same          1920,  chap.  821 

Superintendent  

3,000           Same          1920,  chap.  821 

Assistant  superintendent  

3,000           Same          1920,  chap.  821 

Secretary  

2,000           Same          1920,  chap.  821 

Chief  clerk  

3,162.50      Same          1920,  chap.  821 

Stenographer  

1,955           Same          1920,  chap.  821 

Stenographer  

1,800           Same          1920,  chap.  821 

Supervisor  of  copying  

2,530           Same          1920,  chap.  821 

Chief  of  division  

2,530           Same          1920  chap.  821 

4  Chiefs  of  division  

2,300           Same          1920,  chap.  821 

Chief  clerk  —  old  records  

2,300           Same          1920,  chap.  821 

Assistant  chief  of  division  

2,185           Same          1920,  chap.  821 

Assistant  chief  of  division  

1,840           Same          1920,  chap.  821 

3  Clerks  

2,070           Same          1920,  chap.  821 

2  Clerks  

1,955           Same          1920,  chap.  821 

Clerk  

1,868.75      Same          1920,  chap.  821 

4  Cerks  

1,840           Same          1920,  chap.  821 

3  Clerks  

1,800           Same          1290,  chap.  821 

2  Draftsmen  

1,800           Same          1920,  chap.  821 

Clerk:  

1,740           Same          1920,  chap.  821 

2  Clerks  

1,680           Same          1920,  chap.  821 

Clerk  

1,650           Same          1920,  chap.  821 

4  Clerks  

1,560           Same          1920  chap.  821 

4  Clerks  

1,470           Same          1920,  chap.  821 

Foreman  of  bindery  

2,300           Same          1920,  chap.  821 

4  Bookbinders  

1,620           Same          1920,  chap.  821 

Custodian  

1,800           Same          1920,  chap.  821 

Custodian  

1,200           Same         1920.  chap.  821 

6  Laborers  

1,500           Same          1920,  chap.  821 

COMMISSIONER 

OF  JURORS,  KINGS  COUNTY 

Budget     Mandatory 

Position 

rate             rate                         Law 

Commissioner  

$6,000      Same          1921     chap.    412; 

chap.  628 

Deputy  commissioner  

4,000     Same         1921,  chap.  640 

Secretary  

3,250      Same          1921,  chap.  640 

Clerk  

2,772      Same          1921,  chap.  640 

Fine  and  exempt  clerk  

2,520      Same          1921,  chap.  640 

7  Clerks  

2,  160      Same          1921,  chap.  640 

9  Jury  notice  servers  

1,823      Same          1921,  chap.  640 

Stenographer  

1,464     Same          1921,  chap.  640 

1911, 


200       INVESTIGATION  OF  AFFAIRS  OF 


YORK  CITY 


SHERIFF,  KINGS  COUNTY 

Position 

Under  sheriff 

8  Deputy  sheriffs 

8  Assistant  deputy  sheriffs 

Counsel 

Chief  clerk 

Assistant  clerk 

Equity  clerk 

Assistant  equity  clerk 

Secretary  

Accountant 

Confidential  stenographer 

Telephone  operator 

Warden 

Deputy  warden 

Bookkeeper 

8  Keepers 

3  Matrons 

2  Cleaners 

2  Cooks 

NEW  YORK  STATE  GUARD  AND  NAVAL  MILITIA,  KINGS  COUNTY 

NOTE. —  Wages  of  all  regular  employees  totaling  $259,770  are  mandatory  under 
Military  Law,  section  187,  and  following. 

SUPREME  COURT,  SECOND  DEPARTMENT,  KINGS  COUNTY 


Budget 

Mandatory 

rate 

rate 

Law 

$6,500 

$6,000 

1901,  chap.  705 

2,904 

2,200 

1901,  chap.  705 

2,040 

1,500 

1918,  chap.  647 

5,500 

5,000 

1901,  chap.  705 

3,300 

2,500 

1901,  chap.  705 

2,760 

2,000 

1901,  chap.  705 

2,760 

2,000 

1901,  chap.  705 

2,520 

1,800 

1901,  chap.  705 

2,040 

1,500 

1901,  chap.  705 

2,160 

1,500 

1901,  chap.  705 

1,823 

Same 

1901,  chap.  705 

1,464 

Same 

1901,  chap.  705 

3,500 

3,000 

1901,  chap.  705 

2,640 

2,000 

1901,  chap.  705 

2,040 

1,500 

1901,  chap.  705 

1,708 

1,200 

1901,  chap.  705 

1,464 

1,000 

1901,  chap.  705 

1,100 

750 

1901,  chap.  705 

600 

300 

1901,  chap.  705 

Position 

General  clerk 

Assistant  general  clerk 

Consultation  and  opinion  clerk. 

4  Clerks 

8  Clerks 

5  Clerks 

8  Clerks 

11  Clerks  to  justices 

12  Stenographers 

Confidential  attendant 

39  Attendants 

4  Attendants 

5  Interpreters 

2  Typewriter  operators 


Budget    Mandatory 
rate  rate 

$5,000  Same 
4,500 
7,000 
4,250 
3,750 
3,250 
2,750 
4,000 
4,200 
3,500 
2,500 
2,000 
3,300 


2,500 


Same 
Same 
Same 
Same 
Same 
Same 
Same 
Same 
Same 
Same 
Same 
Same 
Same 


Law 

1921,  Chap.  246, 
1921,  Chap.  246, 
1921,  Chap.  246, 
1921,  Chap.  246, 
1921,  Chap.  246, 
1921,  Chap.  246, 
1921,  Chap.  246, 
1921,  Chap.  246, 
1921,  Chap.  246, 
1921,  Chap.  246, 
1921,  Chap.  246, 
1921,  Chap.  246, 
1921,  Chap.  246, 


168. 
168. 
168. 
168. 
168. 
168. 
168. 
168. 
168. 
168. 
168. 
168. 
168. 


1921,  Chap.  246,  §  168. 


SUPREME  COURT,  SECOND  DEPARTMENT,  APP.  Div.,  KINGS  COUNTY 


Position 

Deputy  clerk 1 

2  Confidential  clerks f 

Case  and  consultation  clerk  f 

Attendants J 

Confidential  clerks  to  justices. . 


Budget    Mandatory 
rate  rate 


Law 


$28,522.69     See  laws   cited  in    1921 

budget,  page  276. 

$16,719.60     See  laws   cited   in    1921 

budget,  page  276. 


SURROGATE'S  COURT,  KINGS  COUNTY 


Position 

Law  assistant 

Chief  clerk  and  clerk  of  court . 


Mandatory 
rate  rate 

$4,000      Same 
9,000      Same 


Law 

Code  Civil  Procedure. 
§  2492  and  2493,  Surro- 
gate court  Act,  §  22. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE 


201 


Position 
Accounting  clerk. 


Assistant  accounting  clerk 

Probate  clerk 

Assistant  probate  clerk 

Administration  clerk 

Assistant  administration  clerk . . 

Certificate  and  financial  clerk.. . 

Guardian  accounting  clerk 

Calendar  clerk 

Index  clerk . . 


5  Recording  clerks 


2  Clerks 

5  Clerks 

Stenographer 

Stenographer 

Typewriter  copyist 

Comparer 

Chief  of  records  and  interpreter. 

Assistant  chief  of  records 

Chief  custodian* 

2  Custodians 

Chief  court  attendant .  . 


Budget 
rate 

Mandatory 
rate 

6,500 

Same 

3,000 

Same 

6,000 

Same 

3,500 

Same 

3,500 

Same 

3,500 

Same 

5,000 

Same 

5,500 

Same 

4,000 

Same 

3,250 

Same 

2,160 

Same 

2,400 

Same 

2,280 

Same 

3,000 

Same 

2,160 

Same 

2,160 

Same 

2,160 

Same 

4,000 

Same 

2,040 

Same 

2,160 

Same 

2,160 

Same 

3,000 

Same 

Law 

§  2492  and  2493,  Surro- 
gate court  Act,  §  22. 
§  2492  and  2493,  Surro- 
gate court  Act,  §  22. 
§  2492  and  2493,  Surro- 
gate court  Act,  §  22. 
§  2492  and  2493,  Surro- 
gate court  Act,  §  22. 
§  2492  and  2493,  Surro- 
gate court  Act,  §  22. 
Code  Civ.  Proc.,  §§2492, 

2493    and    Surrogate 

Act,  Sec.  22.... 
Code  Civ.  Proc.,  §§  2492, 

2493     and     Surrogate 

Act,  §  22. 
Code  Civ.  Proc.,  §§2492, 

2493     and     Surrogate 

Act,  §  22. 
Code  Civ.  Proc.,  §§  2492, 

2493     and     Surrogate 

Act,  §  22. 
Code  Civ.  Proc.,  §§  2492, 

2493     and     Surrogate 

Act,  §  22. 
Code  Civ.  Proc.,  §§  2492, 

2493     and     Surrogate 

Act,  §  22. 
Code  Civ.  Proc.,  §§2492, 

2493     and     Surrogate 

Act,  §  22. 
Code  Civ.  Proc.,  §§  2492, 

2493     and     Surrogate 

Act,  §  22. 
Code  Civ.  Proc.,  §§  2492, 

2493     and     Surrogate 

Act,  §  22. 
Code  Civ.  Proc.,  §§  2492, 

2493     and     Surrogate 

Act,  §  22, 
Code  Civ.  Proc.,  §§  2492, 

2493     and     Surrogate 

Act,  §  22. 
Code  Civ.  Proc.,  §§  2492, 

2493     and     Surrogate 

Act,  §  22. 
Code  Civ.  Proc.,  §§  2492, 

2493     and     Surrogate 

Act,  §  22. 
Code  Civ.  Proc.,  §§  2492, 

2493     and     Surrogate 

Act,  §  22. 
Code  Civ.  Proc.,  §§  2492, 

2493    and    Surrogate 

Act,  §  22. 
Code  Civ.  Proc.,  §§  2492, 

2493     and     Surrogate 

Act,  §  22. 
Code  Civ.  Proc.,  §§  2492, 

2493     and     Surrogate 

Act,  §  22. 


202       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 


Budget       Mandatory 


Position 

rate                rate 

Law 

3  Court  officers  

2,500     Same 

Code  Civ.  Proc.,  §§2492, 

2493     and     Surrogate 

Act,  §  22. 

Telephone  operator  

1,600      Same 

Code  Civ.,  Proc.  §§  2492, 

2493     and     Surrogate 

Act,  §  22. 

Law  assistant  

6,  000     Same 

Code  Civil  Proc.,  §§2492, 

2493     and     Surrogate 

Act,  §  22 

Stenographer  

3,000      Same 

Code  Civil  Proc.,  §§2492, 

2493     and     Surrogate 

Act,  §  22 

Clerk  

2,500      Same 

Code  Civil  Proc.,  §§  2492, 

2493     and     Surrogate 

Act,  §  22 

Stenographer  

2,000      Same 

Code  Civil  Proc.,  §§2492, 

2493     and     Surrogate 

Act,  §  22 

Court  officer  

2,400      Same 

Code  Civil  Proc.,  §§2492, 

2493     and     Surrogate 

Act,  §  22 

2  Recording  clerks  

1,500      Same 

Code  Civil  Proc.,  §§2492, 

2493     and     Surrogate 

Act,  §  22 

4  Laborers,  temporary  totaling  .  . 

5,776      Same 

Code  Civil  Proc.,  §§2492, 

2493     and     Surrogate 

Act,  §  22. 

COUNTY 

COURT,  KINGS  COUNTY 

Budget     Mandatory 

Position 

rate              rate 

Law 

Chief  clerk  

7,  500      Same 

Judiciary    Law,    §§    195 

and  284 

Deputy  chief  clerk  

5,500      Same 

Judiciary    Law,     §§    195 

and  284 

5  Confidential  clerks  

3,250      2,750 

1917,  Chap.  808 

2  Clerks  

4,500      Same 

Judiciary    Law,     §§     195 

and  284 

4  Clerks  

4,300      Same 

Judiciary    Law,    §§    195 

and  284 

2  Clerks  

3,800      Same 

Judiciary    Law,     §§    195 

and  284 

Clerk  

3,700     Same 

Judiciary    Law,    §§    195 

and  284 

6  Clerks  

3,500      Same 

Judiciary    Law,    §§    195 

and  284 

Clerk  

2,520      Same 

Judiciary    Law,    §§    195 

and  284 

Clerk  

2,  160      Same 

Judiciary    Law,    §§    195 

and  284 

5  Stenographers  

5,000      Same 

Judiciary    Law,    §§    197 

and  310 

Stenographer  and  typewriter  .  .  . 

2,520      Same 

Judiciary    Law,    §§    195 

and  284 

Chief  court  attendant  ........ 

3,800      Same 

1920,  Chap.  816,  §  352 

Assistant  chief  court  attendant 

3,300      Same 

1920,  Chap.  816,  §  352 

[9  Court  attendants  

2,500      Same 

1920,  Chap.  816,  §  352 

3  Court  attendants  

2,400      Same 

1920,  Chap.  816,  §  352 

Court  attendant  

2,  160      Same 

1920,  Chap.  816,  §  352 

REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE 


203 


Budget 

Mandatory 

Position 

Rate 

Rate 

Law 

3  Detectives  

3,800 

Same 

Judiciary    Law, 

§§    195 

and  284 

2  Detectives  

2,640 

Same 

Judiciary    Law, 

§§    195 

and  284 

Detective  

2,400 

Same 

Judiciary    Law, 

§§    195 

and  284 

Warden,  grand  jury  

4,000 

Same 

Judiciary    Law, 

§§    195 

and  284 

2  Interpreters  

4,000 

Same 

Judiciary    Law, 

§§    195 

and  284 

2  Interpreters  

2,160 

Same 

Judiciary    Law, 

§§    195 

and  284 

Chief  probation  officer  (male)  .  .  . 

2,160 

Same 

Judiciary    Law, 

§§    195 

and  284 

2  Probation  officers  (male)   

2,160 

Same 

Judiciary    Law, 

§§    195 

and  284 

2  Probation  officers  (female)  

2,160 

Same 

Judiciary   Law, 

§§    195 

and  284 

Telephone  operator  

1,464 

Same 

Judiciary    Law, 

§§    195 

and  284 

Messenger  

2,400 

Same 

Judiciary    Law, 

§§    195 

and  284 

2  Laborers  

1,449 

Same 

Judiciary   Law, 
and  284 

§§   195, 

Female  prison  helper  

1,464 

Same 

Judiciary    Law, 

§§    195 

and  284 

Telephone  operator  

900 

Same 

Judiciary    Law, 

§§    195 

and  284 

Stenographer  

4,500 

Same 

Judiciary    Law, 

§§    195 

and  284 

Stenographer,      transcript     fees 

totaling  $989.50  

Code  Crim.  Proc. 

456 

THE  SUPREME   COURT  LIBRARY  IN  THE  BOROUGH  OF  BROOKLYN 
Budget     Mandatory 

Position  Rate  Rate  Law 

Librarian $4, 800      Same  Education  Law, 

Assistant  librarian 3, 000      Same  Education  Law, 

Clerk 2, 000      Same  Education  Law, 

Assistant  clerk 900      Same  Education  Law, 


COUNTY  CLERK,  QUEENS  COUNTY 


Position 

Deputy  county  clerk 

Assistant  deputy  county  clerk 

Counsel  to  county  clerk 

Private  secretary 

Bookkeeper 

Financial  clerk 

Deputy  financial  clerk 

2  Assistant  tickler  clerks 

Notarial  clerk 

Superintendent  of  block  index. 

Index  clerk 

2  Index  clerks 

Chief  recording  clerk 

Assistant  chief  recording  clerk . 
Chattel  mortgage  clerk 


Budget 

Mandatory 

Rate 

Rate 

$4,500 

$4,500 

3,900 

3,000 

3,500 

3,000 

2,700 

1,500 

2,112 

1,500 

3,250 

2,500 

3,000 

2,000 

2,064 

1,500 

2,520 

1,800 

3,140 

3,000 

2,400 

1,800 

2,160 

1,500 

2,808 

1,800 

2,040 

1,500 

2,064 

1,500 

Law 

1912,  chap.  540,  §  3 
1912,  chap.  540,  §  3 
1912,  chap.  540,  §  3 
1912,  chap.  540,  §  3 
1912,  chap.  540,  §  3 
1912,  chap.  540,  §  3 
1912,  chap.  540,  §  3 
1912,  chap.  540,  §  4 
1912,  chap.  540,  §  4 
1912,  chap.  540, 
1914,  chap.  434 
1912,  chap.  540,  §  4 
1912,  chap.  540,  §  4 
1912,  chap.  540,  §  4 
1912,  chap.  540,  §  4 
1912,  chap.  540,  §  4 


§  4; 


204       INVESTIGATION  or  AFFAIRS  OF  NEW  YORK  CITY 


Budfel 

Mandatory 

Position 

rate 

rate                          '.-aw 

Satisfaction  clerk  

2,280 

1,500    1912,  chap.  540,  §4 

2  Docket  clerks  

2,040 

1,500     1912,  chap.  540,  §4 

Naturalization  clerk  

2,040 

1,500     1912,    chap.    540,    §    4; 

U.  S.  Stat.  1906,  chap. 

359,  §  13 

Assistant*naturalization  clerk.  .  . 

1,708 

1,200     1912,    chap.    540,     §4; 

U.  S.  Stat.  1906,  chap. 

359,  §  13 

Mailing"clerk  

2,040 

1,300     1912,  chap.  540,  §  4 

Clerk  

1,830 

1,500    1912,  chap.  540,  §  4 

Chief  clerk  of  marriage  license 

>    bureau  

2,112 

1,500     1912,  chap.  540,  §  4 

Assistant  chief  clerk  of  marriage 

»    license  bureau  

1,756 

1,200     1912,  chap.  540,  §  4 

General  clerk  

1,756 

1,200     1912,  chap.  540,  §  4 

3|General  clerks  

1,708 

1,200     1912,  chap.  540,  §  4 

Supervisor  of  copying  mutilated 

records  

2,160 

1,500    1912,  chap.  540,  §  4 

10  Copyists  of  mutilated  records.  .  . 

1,708 

1,200     1912,  chap.  540,  §  4 

K    Recording  clerk,  copyist  

1,830 

1,200    1912,  chap.  540,  §  4 

11  Recording  clerks,  copyists  

1,708 

1,200    1912,  chap.  540,  §  4 

4  Comparers  

2,112 

1,500     1912,  chap.  540,  §  4 

Searcher  

2,880 

2,000     1912,  chap.  540,  §  4 

Map  draftsman  

2,040 

1,200     1912,  chap.  540,  §  4 

Stenographer  

1,830 

1,200     1912,  chap.  540,  §  4 

Record  clerk  and  custodian  .... 

1,561 

1,000     1912,  chap.  540,  §  4 

Custodian  

1,464 

1,000     1912,  chap.  540,  §  4 

Bank  messenger  and  clerk  

1,464 

1,000    1912,  chap.  540,  §  4 

Messenger  and  clerk  

1,449 

800     1912,  chap.  540,  §  4 

Messenger  

1,439 

800     1912,  chap.  540,  §  4 

DISTRICT  ATTORNEY,  QUEENS  COUNTY 

Budget 

Mandatory 

Position 

Rate 

Rate                        Law 

Assistant  district  attorney  

$4,500 

$7,500     1921,  chap.  161 

3f  Assistant  district  attorneys  

3,500 

6,500     1921,  chap.  161 

2JDeputy    assistant    district    at- 

torneys   

2,772 

5,000     1921,  chap.  161 

Chief  clerk  

3,140 

4,000     1921,  chap.  161 

Legal  examiner  

3,074 

4,500     1921,  chap.  161 

Clerk  

2,088 

2,750     1921,  chap.  161 

Clerk  (bail  clerk)  

1,200 

2,500     1921,  chap.  161 

Clerk  

824 

1,800     1921,  chap.  161 

Stenographer  

2,376 

2,400     1921,  chap.  161 

Stenographer  

2,400     1921,  chap.  161 

Stenographer  to  grand  jury  .... 

1,464 

1,464    1921,  chap.  161 

Stenographer  to  grand  jury  

1,464     1921,  chap.  161 

County  detective  

"l,'944 

2,100     1921,  chap.  161 

Investigator  

2,160 

2,400     1921,  chao.  161 

4  County  detectives  

1,823 

2,000     1921,  chap.  161 

County  detective  

1,683 

1,683     1921,  chap.  161 

Typist  clerk  

900 

1,800     1921,  chap.  161 

Private  secretary  

3,000    1921,  chap.  161 

3  Process  servers  

1,500     1921,  chap.  161 

Phone  operator  

1,200     1921,  chap.  161 

Stenographer      transcript      fees 

totaling  $1.000  

Code  Grim.  Proc.  952  V 

REPORT  OF  JOINT  LEGISLATIVE   COMMITTEE 


205 


COMMISSIONER  OP  JURORS,  QUEENS  COUNTY 


Position 

Commissioner 

Assistant  commissioner.  .  . 

Clerk 

2  Clerks 

Jury  notice  server 

Stenographer 


Budget     Mandatory 


Rate 
$5,000 
3,250 
2,160 
1,823 
1,610 
1,376 


Rate 
Same 
Same 
Same 
Same 
Same 
Same 


Law 

1920,  chap.  819 

1921,  chap.  640, 
1921,  chap.  640, 
1921,  chap.  640, 
1921,  chap.  640, 
1921,  chap.  640, 


PUBLIC  ADMINISTRATOR,  QUEENS  COUNTY 


Position 
Public  administrator 


Budget     Mandatory 
Rate  Rate 

$3, 500      Same 


Law 
1921,  chap.  778 


NEW  YORK  STATE  GUARD  AND  NAVAL  MILITIA,  QUEENS  COUNTY 

NOTE. —  Wages  of  all  regular  employees  totaling  $7,300  are  mandatory  under 
Military  Law,  section  187,  and  following. 


SUPREME  COURT,  QUEENS  COUNTY 


Position 


Budget     Mandatory 

Rate             Rate 

Law 

$4,  250      Same 

Judiciary  Law, 

3,  750      Same 

Judiciary  Law, 

2,750      Same 

Judiciary  Law, 

2,500      Same 

Judiciary  Law, 

2,400      Same 

Judiciary  Law, 

1,800      Same 

Judiciary  Law, 

2,  500      Same 

Judiciary  Law, 

2,500      Same 

Judiciary  Law, 

2,400      Same 

Judiciary  Law, 

Special  deputy  clerk 

3  Special  deputy  clerks 

3  Assistant  special  deputy  clerks. 

Chief  court  attendant 

6  Court  attendants 

Court  attendant 

Court  attendant 

Interpreter 

Interpreter 

SUPREME  COURT,  SECOND  DEPARTMENT,  APPELLATE  DIVISION,  QUEENS  COUNTY 


Position 

Deputy  clerk 

2  Confidential  clerks 

Case  and  consultation  clerk  .  . 

Attendants 

Confidential  clerks  to  justices. 


Budget     Mandatory 
Rate  Rate 


$9,299  06 
5,451  05 


Law 

See  laws  cited  in   1921 
budget,  page  276 

See  laws  cited  in   1921 
budget,  page  276 


COUNTY  Coi 

Position 
Confidential  clerk              .... 

JRT,  QUEENS  COUNTY 

Budget     Mandatory 
rate             rate 
$3,250        $2,750 
4,500      Same 
3,350      Same 
3,  100      Same 
4,200          4,000 
2,592      Same 
2,500      Same 
2,2?0      Same 
2,700      Same 
3,000      Same 

Special  deputy  clerk  
2  Assistant  special  deputy  clerks.. 
Assistant  special  deputy  clerk  .  . 
Stenographer 

Court  crier 

Chief  court  attendant  
3j,  Court  attendants  
Interpreter 

2  Countv  detectives  .  . 

Law 

1917,  chap.  808 
Judiciary  Law,  §  287 
Judiciary  Law,  §  287 
Judiciary  Law,  §  287 
1920,  chap. 818 
Judiciar}T  Law, 
Judiciary  Law, 
Judiciary  Law, 
Judiciary  Law, 
1920,  chap.  779 


206       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 


DISTRICT  ATTC 

Position 
Assistant  district  attorney  
Assistant  district  attorney  
Chief  or  confidential  clerk  
Grand  jury  stenographer. 

>RNET,  RICHMOND  COUNTY 
Budget     Mandatory 
rate              rate                          Law 
$3,500      Same          1920,  caap.  795 
3,500      Same          1920,  chap.  795 
2,500      Same          1920,  chap.  795 
2,000      Same          1920,  chap.  795 
1,500      Same          1920,  chap.  795 
1,800      Same          1920,  chap.  795 
1,500      Same          1920,  chap.  795 
2,500      Same          1920,  chap.  795 

Grand  jury  stenographer  
Process  server  and  clerk 

Messenger    

Assistant  district  attorney  

COMMISSIONER  OF  JURORS,  RICHMOND  COUNTY 

Budget     Mandatory 

Position  rate  rate  Law 

Commissioner  ................         $2,  500        $1,  500     1S99,  chap.  441 

Assistant  commissioner  ........  2,  160          2,  160     1921,  chap.  640,  §  6 

Clerk  ........................  2,160          2,160     1921,  chap.  640,  §  6 

NEW  YORK  STATE  GUARD  AND  NAVAL  MILITIA,  RICHMOND  COUNTY 

NOTE.  —  Wages  of  all  regular  employees  totaling  $13,505  are  mandatory   under 
Military  Law,  section  187,  and  following. 

SUPREME  COURT,  RICHMOND  COUNTY 

Budget         Mandatory 

Position  rate  rate  Law 

Special  deputy  clerk  ...........         $4,500          Same         Judiciary  Law,  §  168 

Special  deputy  clerk  ...........  4,250         Same         Judiciary  Law,  §  168 

Clerk  ........................  3,  250          Same         Judiciary  Law,  §  168 

Court  attendant  ..............  2,  600          Same         Judiciary  Law,  §  354 

2  Court  attendants  .............  2,  100         Same         Judiciary  Law,  §  354 

Confidential  clerks  to  justices.  .  1,666.36     Same          Judiciary  Law,  §§160 

and  279 

SUPREME  COURT,  SECOND  DEPARTMENT,  APPELLATE  DIVISION,  RICHMOND  COUNTY 

Budget     Mandatory 

Position  rate  rate  Law 

Deputy  clerk  ...............  ) 

2 


*u>«  02  ........ 

Attendants  ................  ] 

Confidential  clerks  to  justices..  .         963  71     ........     See  laws  cited  at  page  290 

of  the  1921  budget 
COUNTY  COURT  AND  SURROGATE'S  COURT,  RICHMOND  COUNTY 

Budget     Mandatory 

Position  rate  rate  Law 

Court  stenographer  ..............         $4,  200        $4,  000     1920,  chap.  818. 

SUPREME  COURT  LIBRARY,  RICHMOND  COUNTY 

Budget     Mandatory 

Position  rate  rate  Law 

Librarian  ....................         $3,  000      Same          Education  Law,  1180-c 

Assistant  Librarian  ...........  1,464      Same          Education  Law,  1180-c 

Junior  clerk  ..................  900      Same          Education  Law,  1180-c 

Grand  total  above  mandatory  fixations  ..........................  $5,  389,025.44 


REPOET  OF  JOINT  LEGISLATIVE   COMMITTEE 


207 


EXHIBIT  2 

Mandatory  County  Salaries. 

The  following  is  a  list  of  the  Mandatory  County  Salaries  which 
would  not  be  affected  by  a  bill  similar  to  the  one  attached  Exhibit 
3  (Senate  Int.  590,  Print  622,  1916)  because  they  pertain  to 
judicial  or  elective  offices.  It  is  interesting  to  note  that  the 
salaries  of  the  County  Clerk  of  Richmond  county  and  the  Sheriff 
of  Queens  County  are,  at  present,  discretionary  although  they  are 
also  elective  officers.  Furthermore,  the  additional  compensation 
to  the  County  Judges  for  services  in  drawing  jurors,  is  discretion- 
ary under  Judiciary  Law  Section  26  although  they  are  judicial 
officers.  It  will  be  noted  that  the  Commissioners  of  Jurors  of 
each  county  are  listed  in  Table  I,  although  in  a  later  amendment 
to  Senate  Int.  590  of  1916  Commissioners  of  Jurors  were  also 
excepted  from  its  operation. 


NEW  YORK  COUNTY 

Budget     Mandatory 
Position  rate  rate 

County  clerk $15, 000      Same 

District  attorney 15, 000      Same 

Register 12,000      Same 

Sheriff 12,000      Same 

28  Justices  of  the  Supreme  Court, 
first  department,   New  York 

and  Bronx  counties 7, 500      Same 

7  Judges,  court  of  general  sessions        17,500      Same 
2  Surrogates 15,000      Same 


Law 
1884,  chap.  299 

1920,  chap.  822 

1921,  chap.  227,  §  2510 
1920,  chap.  565 


Const.,  art.  VI,  §  12 
1911,  chap.  526 
1919,  chap.  641 


BRONX  COUNTY 

Budget       Mandatory 
Position  rate 

County  clerk $10,000 


District  attorney 

Register 

Sheriff 

Surrogate 

County  judge . 
Visiting  judge . 


10,000 
10,000 
10,000 
10,000 
10,000 
2,000 


rate 
Same 
Same 
Same 
Same 
Same 
Same 
Same 


KINGS  COUNTY 


County  clerk $12, 000 

District  attorney 15, 000 

Register 12,000 

Sheriff 15,000 

14  Justices     of     Supreme     Court, 

second  department 

Justices  designated  to  Appellate 

Division  from  other  districts.. 
Official    referees    at    Appellate 

Division 39,728  46 

Official  referees 2, 820  06 

Surrogate 15,000  00 


Same 
Same 
Same 
Same 


Law 

1913,  chap.  266, 
1913,  chap.  266, 
1913,  chap.  266, 
1913,  chap.  266, 
1913,  chap.  266, 
1913,  chap.  266, 
1921,  chap.  141 


1911,  chap.  641 
1920,  chap.  825 
1911,  chap.  780 
1901,  chap.  705 


7, 500      Same         Const.,  art.  VI,  §  12 
8,04211      Same         Judiciary  Law,  §  76 


Same          Judiciary  Law,  §  116 
Same          1913,  chap.  724 
Same          1919,  chap.  641 


208       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 


QUEENS  COUNTY 

Budget 

Mandatory 

Position                                    rate 

rate 

Law 

County  clerk  $8,000  00 

Same 

1912,  chap.  540 

District  attorney  12,000  00 

Same 

1912,  chap.  161 

Additional      compensation      to 

justices  of  second  department 

residing  outside  Kings  county.  39,519  64 

Same 

Const.,  art.  VI,  §  12 

Justices  designated  to  Appellate 

Division  from  other  districts..     2,621  91 

Same 

Judiciary  Law,  §  76 

Official    referees    to    Appellate 

Division  12,  952  40 

Same 

Judiciary  Law,  §  116 

Official  referees  919  41 

Same 

1913,  chap.  724 

Surrogate  10,  000  00 

Same 

County  Law,  §  232 

County  judge  10,  000  00 

Same 

County  Law,  §  232 

RICHMOND  COUNTY 

District  attorney  $15,000  00 

Same 

1915,  chap.  408 

Sheriff  6,000  00 

Same 

1916,  chap.  83 

Additional      compensation      to 

justices  residing  outside  Kings 

county  6,  986  84 

Same 

Const.,  art.  VI,  §  12 

Judges  designated  to  Appellate 

Division  from  other  districts.  .         463  54 

Same 

Const.,  art.  VI,  §  12 

Official     referees     of     Appellate 

Division  2,  289  91 

Same 

Judiciary  Law,  §  116 

Official  referee  162  55 

Same 

I   -Lc/^JLj  Cil&p.   iOJ- 

\  1913,  chap.  724 

County  judge  and  surrogate.  ...     7,  500  00 

Same 

County  Law,  §  232 

Grand  total  above  mandatory  fixations  ...........................  $837,506.83 


EXHIBIT  3. 
STATE  OF  NEW  YOEK. 

No.  622  Int.  590. 

IN  SENATE, 

FEBRUARY  21,  1916. 

Introduced  by  Mr.  Brown  —  (for  the  committee)  —  read  twice 
and  ordered  printed,  and  when  printed  to  be  committed  to  the 
Committee  on  Affairs  of  Cities. 

AN  ACT 

To -provide  for  submitting  to  the  voters  of  the  city  of  New  York 
the  question;  "  Shall  the  expenses  of  County  Offices  of  a 
county  included  within  the  city,  and  the  salaries  and  compen- 
sation of  all  county  officers  and  employees  of  any  such  county, 
except  judicial  or  elective  officers,  be  fixed  by  the  city  author- 


REPOKT  OF  JOINT  LEGISLATIVE  COMMITTEE  209 

ities ;  "  and  declaring  the  effect  of  an  affirmative  determi- 
nation of  such  question. 

The  People  of  the  State  of  New  York,  represented  in  Senate 
and  Assembly,  do  enact  as  follows: 

Section  1.  There  shall  be  submitted  to  the  voters  of  the  city  of 
New  York  at  the  general  election  held  in  November,  nineteen 
hndred  and  seventeen,  the  question: 

"  Shall  the  expenses  of  county  offices  of  a  county  included  within 
this  city,  and  the  salaries  and  compensation  of  all  county  officers 
and  employees  of  any  such  county,  except  judicial  or  elective 
officers,  be  fixed  by  the  city  authorities  ?  " 

If  a  majority  of  votes  cast  on  such  question  at  any  election  be 
in  the  affirmative  the  power  to  fix  and  determine  the  expenses  of 
the  county  offices  of  any  county  included  within  the  city,  and  the 
amount  and  the  times  and  manner  of  payment  of  the  salary  or 
compensation  of  any  county  officers  or  employees  of  any  such 
county,  except  a  judicial  or  elective  officer  and  the  term  of  office 
and  mode  of  appointment,  number  and  grade  of  any  appointive 
county  officer,  and  of  the  clerks,  assistants  or  employees  in  any 
county  office,  shall  notwithstanding  the  provisions  of  any  general, 
special  or  local  law,  be  vested  in  the  city  authority  or  authorities 
which  would  have  power,  in  the  absence  of  statutory  regulation,  to 
fix  and  determine  such  expenses,  salaries,  compensation  or  other 
matters,  if  such  offices,  officers  or  employees  were  offices,  officers 
or  employees  of  the  city. 

§  2.  This  act  shall  take  effect  immediately. 

Amendments  in  later  prints  of  this  bill  were  as  follows: 

Amendment  No.  I. 

except  a  judicial  or  elective  officer,  a  commissioner  of  jurors,  and 
officers  or  employees  of  a  Court  of  Record,  or  an  assistant  or 
employee  of  a  district  attorney, 

Amendment  No.  II. 

judge  or  justices,  an  elective  officer,  a  clerk  of  a  court  of  record, 
a  commissioner  of  juror,  a  district  attorney, 


210       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 


EXHIBIT  4. 

MANDATORY   SALARIES  IN   1921   BUDGET 
(EXCLUSIVE  OF  COUNTY  POSITIONS) 

BOARD  OP  ALDERMEN 

Position  Budget     Mandatory  Mandatory  Law 

rate  rate  total 

Vice  chairman $4, 000      $4, 000  $4, 000*  Charter,  §  18 

Chairman,  finance  com- 
mittee           4, 000        4, 000  4, 000*  Charter,  §  18 

65  Aldermen. .' 3,000        2;000          130,000*  Charter,  §  18 

BOARD  or  ELECTIONS 
Position  Budget    Mandatory   Mandatory  Law 

rate  rate  total 

All 964,073    Election  Laws  200,  Char- 

ter, §  230 

LICENSE  DEPARTMENT 
Position  Budget    Mandatory    Mandatory  Law 

rate  rate  total 

Commissioner 7,500        7,500  7,500     Charter,  640 

BOROUGH  PRESIDENTS 

Position  Budget    Mandatory   Mandatory  Law 

rate  rate  total 

Five 10,000      10,000  50,000*  Laws    1920,    chap.    32, 

Charter,  38 
BOARD  OF  EDUCATION 

Position  Budget    Mandatory   Mandatory  Law 

rate  rate  total 

49,912,415.67*  Education  Law  887,  subd. 

7,  represents  product 
of  mandatory  4.9  mill 
tax 

COLLEGE  OF  THE  CITY  OF  NEW  YORK 
Position  Budget    Mandatory   Mandatory  Law 

rate            rate  total 
Total   Personal   ser- 
vice  903,041.66        Laws  1918,    chap.    583; 

Charter,  §  1131 

BROOKLYN  INSTITUTE  OF  ARTS  AND  SCIENCES 

Position  Budget    Mandatory   Mandatory  Law 

rate  rate  total 

20,000  Charter,  §§  230;  624;  Laws 

1911,  Chap.  696;  Laws 
1906,  Chap.  618 
POLICE  DEPARTMENT 
Position  Budget    Mandatory   Mandatory 

rate  rate  total  Law 

Chief  surgeon ..       $6,500      $3,500        $3,500    Charter,  §  299 
Marine  inspector       4,900        4,400          4,400    Laws  1920,  Chap.  708;  Charter, 

§  276-C 
Chief  lineman . .         2, 400        1, 200          1, 200    Charter,  §  276-A 


REPORT  OF   JOINT  LEGISLATIVE   COMMITTEE 


211 


2  Deputy      Com- 
missioners.. .  . 
Volunteer  system: 

Queens 

Richmond.  . 


5,500 


FIRE  DEPARTMENT 
5,000        10,039    Cia-ter,  §720 


15,400   15,400 
10,800   10,800 


15,400    Cha-ter,  §722 
10, 800    Charter,  §  722 


Commissioner .  . 


Position 

rate 

rate 

10  Justices  
10  Stenographers  .  . 

812,030 
3,800 

$12,030 
3,000 

1  Clerk  

6,500 

6,000 

1  Deputy  clerk.  .  . 

4,500 

3,000 

1  Deputy  Clerk  .  . 

4,000 

2,000 

1  Deputy  clerk... 

3,560 

2,000 

2  Deputy  clerks.  . 

3,074 

2,000 

12  Assistant  clerks  . 

3,074 

1,500 

1  Assistant  clerk.. 

2,616 

1,500 

7  Assistant  clerks. 

2,520 

1,500 

3  Interpreters  

2,640 

1,500 

1  Chief  attendant. 

2,304 

1,200 

24  Attendants  

2,160 

1,200 

1  Librarian  

3,500 

3,500 

DEPARTMENT  OF  PLANT  AND  STRUCTURES 
7,500        7,500          7,500    Laws  1916,  Chap.  523 

CITY  COURT 
Budget    Mandatory  Mandatory 

total  Law 

120,003*  La,v  1907,  Chap.  707,  §  4 
30,000    Law  1893,  Chap.  651  and  N.  Y. 

C.  Court  Aat  §  11 
6,000    N.  Y.  C.  Court  Act  §  5;  aTi'd 

1921 
3,000    Consol.  Act.  §  1275  Am'd.  1894 

and  N.  Y.  C.  Ct.  Act.  §  5 
2,000    Consol.  Act.  §  1275  Am'd  1894 

and  N.  Y.  C.  Ct.  Act.  §  5 
2,000    Consol.  Act.  §  1275  Am'd.  1894 

and  N.  Y.  C.  Ct.  Act.  §  5 
4,000    Consol.  Act.  §  1275,  Am'd  1894 

and  N.  Y.  C.  Ct.  Act,  §  5 
18,000    Consol.  Act.  §  1275,  Am'd  1894 

and  N.  Y.  C.  Ct.  Act,  §  5 
1,500    Consol.  Act.  §  1275,  Am'd.  1894 

and  N.  Y.  C.  Ct.  Act,  §  5 
10,500    Consol.  Act.  §  1275,  Am'd.  1894 

and  N.  Y.  C.  Ct.  Act,  §  5 
4,500    Consol.    Act.  §  1275,  City  Ct. 

Act,  §  12 
1 , 200    Laws  1898,  Chap.  172  and  N.Y. 

C.  Ct.  Act,  §  14 
28, 800    Laws  1898,  Chap.  172  and  N.  Y. 

C.  Ct.  Act,  §  14 
3,500    Laws  1921,   Chap.  709;   Salary 

fixed  by  Trustees  of  Library 

at  not  over  $5,000 


CITY  MAGISTRATES  COURT 
Budget    Mandatory  Mandatory 
Position  rate  rate 

1  Chief  magistrate       11,000      10,000 


total  Law 

10, 000*  Laws  1915,  Chap.  531 


Position 
41  Justices. . . 
6  Justices. . . 
18  Clerks... 


MUNICIPAL  COURTS 
Budget    Mandatory  Mandatory 
rate  rate 

9,000  9,000 
8,003 
3,000 


8,000 
3,500 


total  Law 

369,000*  Laws  1920,  Chap.  310 
4S,000*  Laws  1920,  Chap.  310 
54,030    Laws  1915,  Chap.  279  and  581; 
Charter     §     1373.     All    em- 
ployees transferred  "  at  their 
present  salaries." 

6  Clerks 3,000        2,000        12,000    Laws  1915.,  Chap.  279  and  581; 

Charter  §  1373.  All  em- 
ployees transferred  "  at  their 
present  salaries." 


212       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 


18  Deputy  clerks.  .  . 

3,500 

3,000 

54,000 

Laws  1915,  Chap.  279  and  581- 

Charter     §     1373.    All    em- 

ployees transferred  "  at  their 

present  salaries." 

6  Deputy  clerks  .  . 

3,000 

2,000 

12,000 

Laws  1915,  Chap.  279  and  581  ; 

Charter     §     1373.    All    em- 

ployees transferred  "  at  their 

present  salaries." 

42  Assistant  clerks. 

3,500 

3,000 

126,000 

48  provided  in  budget  but  only 

44  were  transferred  in  1915. 

2  Assistant  clerks. 

3,500 

2,000 

4,000 

48  provided  in  budget  but  only 

44  were  transferred  in  1915 

45  Stenographers.  . 

3,074 

2,000 

90,000 

46  prov:ded  for,  only  45  trans- 

ferred 

9  Interpreters.  .  .  . 

2,232 

1,500 

12,500 

46  provided  for,  only  45  trans- 

ferred 

12  Interpreter  .... 

2,160 

1,500 

18,000 

46  provided  for,  only  45  trans- 

ferred 

1  Interpreter  

2,088 

1,500 

1,500 

46  provided  for,  only  45  trans- 

ferred 

1  Interpreter 

2,040 

1,500 

1,500 

40  Drovidcd  for   onlv  4^)  trSiim— 

ferred 

2  Interpreters.  .  .  . 

2,016 

1,200 

2,400 

46  provided  for,  only  45  trans- 

ferred 

109  Attendants.... 

2,160 

1,500 

163,500 

46  provided  for,  only  45  trans- 

ferred 

8  Attendants  

1,944 

1,500 

12,000 

46  provided  for,  only  45  trans- 

ferred 

1  Bookkeeper  .... 

2,376 

2,000 

2,000 

46  provided  for,  only  45  trans- 

ferred 

1  Attendant       to 

Board  of  Jus- 

tices   

1,040 

300 

300 

46  provided  for,  only  45  trans- 

ferred 

Grand  total 

$53  275  530  53 

Total  of  starred 

items.  .  . 

50  647  415  67 

Total  unstarred 

items  .    ... 

$2  6?8  114  86 

EXHIBIT  5. 

STATE  OF  NEW  YOKK. 

3d  Edg.  656.  Nos.   626,  1487,  1557,  1734.  Int.   59£ 

IN  SENATE, 

FEBRUARY  21,  1916. 

Introduced  by  Mr.  Brown  —  (for  the  ISTew  York  Committee)  — 
read  twice  and  ordered  printed,  and  when  printed  to  be  com- 
mitted to  the  Committee  on  Affairs  of  Cities  —  reported  favor- 
ably from  said  Committee  with  amendments,  and  ordered 
reprinted  as  amended,  and  committed  to  the  Committee  of  the 
Whole  —  amended  and  ordered  reprinted  as  amended  and 


EEPOBT  OF  JOINT  LEGISLATIVE  COMMITTEE  213 

when  printed  to  be  recommitted  to  the  Committee  of  the  Whole 
—  ordered  to  a  third  reading,  amended  and  ordered  reprinted 
retaining  its  place  in  the  order  of  third  reading. 

AN  ACT 

To  provide  for  submitting  to  the  voters  of  the  city  of  New  York 
the  question :  "  Shall  the  salaries  or  compensation  of  all  city 
or  borough  officers  and  employees,  except  the  salaries  of  judi- 
cial or  elective  officers  and  of  members  of  the  supervising  or 
teaching  staff  of  the  department  of  education,  be  fixed  by 
the  local  authorities  ?"  and  declaring  the  effect  of  an  affirma- 
tive determination  of  such  question. 

Tlie  People  of  fJie  State  of  New  York,  represented  in  Senaie 
<jnd  Assembly,  do  enact  as  follows: 

Section  1.  There  shall  be  submitted  to  the  voters  of  the  city 
of  New  York  at  the  general  election  held  in  November,  nineteen 
hundred  and  seventeen,  the  question :  "  Shall  the  salaries  or  com- 
pensation of  all  city  or  borough  officers  and  employees,  except  the 
salaries  of  judicial  or  elective  officers  and  of  members  of  the  super- 
vising or  teaching  staff  of  the  department  of  education,  be  fixed 
by  the  local  authorities  ?  "  If  a  majority  of  the  votes  cast  on  such 
question  at  such  election  be  in  the  affirmative,  the  board  of  alder- 
men of  such  city,  upon  the  recommendation  of  the  board  of  estimate 
and  apportionment,  shall  have  the  exclusive  power  to  fix  the 
salary  or  compensation  of  every  city  or  borough  officer  or  employee 
whose  salary  or  compensation  is  paid  wholly  or  partly  out  of  the 
city  treasury,  except  the  salary  of  a  judge  or  justice  or  elective 
officers  and  clerks  of  courts  of  record  whose  salary  is  fixed  by 
statute,  and  except  the  salaries  of  members  of  the  supervising  or 
teaching  staff  of  the  department  of  education,  notwithstanding  the 
provisions  of  any  general,  special  or  local  law,  and  irrespective  of 
the  amount  of  salary  or  compensation  fixed  by  any  such  law,  sub- 
ject only  to  the  limitations  and  conditions  prescribed  by  statute 
respecting  the  recommending  or  fixing  of  salaries  or  compensation 
of  appointive  officers  or  employees  by  such  boards. 

§  2.  This  act  shall  take  effect  immediately. 


214       INVESTIGATION  OP  AFFAIRS  OF  NEW  YORK  CITY 


POLITICAL  INTERFERENCE  WITH  POLICE   ADMIN- 
ISTRATION. 

All  experience  has  shown  that  a  vital  requirement  for  effective 
and  impartial  enforcement  of  the  law  by  the  Police  Department 
is  the  complete  freedom  of  that  Department  and  its  head,  the  Po- 
lice Commissioner,  from  interference  by  the  Mayor.  The  elective 
head  of  the  city  government  is  necessarily  subject  from  a  variety 
of  quarters  to  pressure  for  special  or  privileged  treatment.  A 
policeman  desires  to  be  promoted,  or  to  be  detailed  to  a  "  soft 
berth/7  or  to  a  precinct  nearer  his  home.  The  proprietor  of  a 
motion  picture  house  believes  that  the  police  are  unduly  severe  in 
the  enforcement  of  the  law  against  the  admission  of  minors. 
A  countless  variety  of  similar  situations  arises  every  day.  Pres- 
sure upon  the  Mayor  is  continuous.  If  he  succumbs  and  controls 
the  police  commissioner  in  the  disposition  of  such  matters,  the 
police  administration  is  bound  to  fail,  for  pull  and  influence,  with 
their  attendant  demoralization,  have  then  been  the  governing 
force  in  the  department.  Effective  law  enforcement  is  impossible 
when  the  rank  and  file  of  the  force  or  the  public  generally  become 
convinced  that  the  Police  Department  is  administered  according 
to  personal  or  political  "pull."  That  the  Police  Department  un- 
der Mayor  Hylan  and  Commissioner  Enright  has  been  too  much 
subject  to  this  demoralizing  tendency  is  established  by  the  evi- 
dence before  this  Committee. 

Mayor  Hylan's  first  Police  Commissioner  was  Frederick  H. 
Bugher,  who  did  not  seek  the  appointment  and  was  not  eager  to 
accept  it. 

On  the  Saturday  preceding  his  appointment,  in  a  conversa- 
tion with  Mayor-elect  Hylan,  Mr.  Bugher  stated  that  the  Police 
Commissioner  could  make  a  success  of  the  department  only  if  he 
had  an  absolutely  free  hand  and  was  not  interfered  with  in  any 
way,  that  he  must  be  permitted  to  select  all  of  his  deputy  police 
commissioners,  make  all  promotions,  assignments  and  appoint- 
ments without  any  interference  from  the  outside.  Mr.  Bugher 
told  the  Mayor-elect  that  he  feared  the  commissioner  would  be 
interfered  with  by  politicians  and  perhaps  the  incoming  Mayor 
himself.  He  suggested  that  whoever  was  appointed  commissioner 
be  given  six  months  in  which  to  demonstrate  whether  he  was  cap- 
able of  running  the  department  or  not  and  if  the  Mayor  was  not 
satisfied  with  the  man  he  appointed,  then,  at  the  end  of  that  time, 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  215 

he  should  remove  him  and  put  in  someone  else,  but  he  should 
not  constantly  interfere  with  him.  Judge  Hylan  seemed  to  agree 
that  that  was  the  way  it  ought  to  be  done. 

When  the  Mayor  told  Mr.  Bugher  that  he  was  to  be  appointed, 
Bugher  urged  him  to  think  the  matter  over  to  see  if  he  could  not 
get  a  man  who  would  better  suit  him  and  said  further,  if  he  ac- 
cepted the  appointment  it  would  only  be  on  the  conditions  which 
he  had  named  to  Mr.  Hylan  the  previous  Saturday.  The  Mayor 
replied,  "  It  is  because  you  talk  that  way  —  that's  why  I  want 
you  for  my  commissioner." 

Hylan  recommends  Solovei. 

On  January  2nd,  the  Mayor  sent  for  Bugher  and  introduced 
him  to  a  Mr.  Solovei.  The  Mayor  said  he  (Solovei)  would  make 
an  excellent  deputy  commissioner  and  asked  Mr.  Bugher  to  ap- 
point him  and  put  him  in  charge  of  the  Detective  Bureau  as  sec- 
ond deputy  commissioner.  Bugher  told  the  Mayor  that  Solovei 
was  not  the  kind  of  a  man,  he  wanted  as  one  of  the  .deputies  as 
he  had  been  counsel  for  one  of  the  "  pickpocket  trusts."  The 
Mayor  said,  "  Oh,  he  has  represent-'1  '  a  few  pickpockets  and  I 
have  known  him  a  long  time  and  he  is  a  good  lawyer.'1  Bugher 
said  he  did  not  feel  like  appointing  him  and  the  Mayor  did  not 
press  the  matter  further. 

On  January  3rd,  the  Mayor  sent  for  Bugher  and  introduced 
him  to  a  lawyer,  and  asked  Bugher  to  listen  to  the  lawyer's  com- 
plaint. It  was  in  reference  to  policemen  being  detailed  to  cer- 
tain hotels.  The  lawyer  represented  some  people  who  owned  a 
chain  of  hotels,  in  three  of  which  uniformed  policemen  were  sta- 
tioned. The  lawyer  said  he  did  not  know  why  the  policemen  were 
there  and  he  named  the  location  of  one  of  the  hotels  and  Bugher 
told  the  Mayor,  in  the  presence  of  the  lawyer,  that  it  had  always 
been  a  disreputable  resort  and  he  would  remove  the  patrolmen  only 
after  he  had  made  a  thorough  investigation.  After  the  lawyer 
went  out  the  Mayor  said  that  the  lawyer  was  a  very  prominent 
man  and  probably  as  close  to  President  Wilson  as  any  man  in  the 
United  States. 

The  Mayor  sent  first-grade  Detective  O'Hara  to  Bugher  with 
instructions  to  appoint  a  certain  individual  as  property  clerk. 
Bugher  sent  back  word  to  the  Mayor  that  there  was  no  vacancy  as 
property  clerk  and  that  Bugher  did  not  care  for  the  man's  ap- 
pearance and  would  not  have  appointed  him  anyhow. 


216       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

The  second  day  that  Bugher  was  in  office,  O'Hara  came  to  aim 
and  handed  him  an  envelope  on  which  were  written  the  names  of 
policemen  that  the  Mayor  wanted  Bugher  to  transfer  from  one 
post  to  another.  Bugher  told  O'Hara  to  ask  the  Mayor  to  sneak 
to  him  personally  about  the  matter.  The  Mayor  wrote  Bugher  a 
letter  requesting  him  to  appoint  Edwin  J.  O'Malley  a  deputy  po- 
lice commissioner. 

About  the  second  week  Bughei  was  in  office  he  appointed  Mr. 
Cambridge  Livingston  a  deputy  police  commissioner.  The 
Mayor  telephoned  to  Bugher  that  afternoon  when  he  saw  the  ap- 
pointment in  the  evening  papers  and  scolded  him  for  making  the 
appointment  without  consulting  the  Mayor.  Bugher  explained 
that  he  understood  he  was  to  make  all  the  appointments  and  he 
selected  Livingston  because  he  would  make  a  good  trial  deputy. 
He  was  a  lawyer.  The  next  day  the  Mayor  sent  for  him  and 
found  fault  with  him  again  for  appointing  Mr.  Livingston.  His 
principal  grievance  was  that  Livingston  lived  on  Fifth  Avenue. 

One  day  when  Bugher  was  at  City  Hall  the  Mayor  said  that  he 
wanted  Bugher  to  reduce  Dillon  from  the  rank  of  Inspector  to 
that  of  Captain.  He  was  then  acting  as  Chief  Inspector. 
Bugher  said  that  he  thought  it  was  unfair  to  reduce  a  man  with- 
out cause.  Indeed,  Bugher  had  had  the  twenty-two  inspectors 
before  him  on  January  2nd,  had  told  them  he  did  not  intend  to 
make  any  reductions  but  was  going  to  give  them  a  chance  and  if 
they  served  loyally  and  faithfully  they  would  remain  inspectors. 

The  Mayor  wrote  Bugher  a  letter  introducing  Mr.  Bert  I. 
Snyder  of  the  Brooklyn  Eagle  as  a  friend  of  his  of  long  stand- 
ing and  said  that  he  wished  to  make  an  exception  to  his  policy 
against  placing  newspaper  men  in  public  office  and  to  recommend 
Snyder  as  a  deputy  police  commissioner.  Previously  Bugher  had 
received  a  letter  from  the  Mayor  saying  that  he  was  "  absolutely 
opposed  to  newspaper  men  and  politicians  running  the  Police  De- 
partment." This  was  in  connection  with  some  reference  he  had 
seen  in  the  press  to  the  effect  that  Bugher  was  considering  news- 
paper men  for  appointment,  Bugher  told  the  Mayor  that  he  did 
not  think  Snyder  would  be  a  suitable  man  for  a  deputy  commis- 
sioner. The  Mayor  asked  why.  Bugher  said  that  he  thought 
"  the  crowd  over  there  would  lull  him  to  sleep  in  about  48  hours. 
He  was  a  fine  old  gentleman." 

The  Mayor  sent  for  Bugher  in  a  great  hurry  one  day.  When 
he  arrived  at  the  Mayor's  office,  the  Mayor  told  him  a  patrolman 


EEPOKT  OF  JOINT  LEGISLATIVE  COMMITTEE  217 

had  been  fined  five  days'  pay  for  drinking  a  cup  of  coffee 
while  on  duty  in  Brooklyn.  Bugher  stated  that  this  was 
impossible  as  no  police  trials  had  been  held  up  to  that  time  during 
Bugher 's  administration.  The  Mayor  insisted  that  it  had  been 
done  and  Bugher  should  make  a  thorough  investigation.  Bugher 
promised  to  do  so  and  did,  but  no  such  thing  had  occurred. 

During  the  twenty-three  days  Bugher  was  in  office  the  Mayor 
sent  for  him  almost  every  day  in  reference  to  some  such  matter 
or  in  reference  to  appointments,  etc. 

On  January  22nd  the  Mayor  sent  for  Bugher  and  handed  him 
a  presentment  handed  up  by  the  Extraordinary  Grand  Jury  ap- 
pointed in  connection  with  the  Ruth  Cruger  case.  It  referred  to 
nine  motorcycle  patrolmen  who  were  indirectly  connected  with 
that  case  and  recommended  that  they  either  be  dismissed  or  placed 
on  trial.  Bugher  stated  that  a  copy  had  already  been  furnished 
to  him  by  the  District  Attorney.  The  Mayor  asked  him  what  he 
was  going  to  do  about  it.  He  said  he  was  going  to  put  them  on 
trial.  The  Mayor  said  they  should  be  dismissed.  Bugher  said, 
*'  But  we  cannot  dismiss  them  because,  there  is  not  sufficient  evi- 
dence to  hold,  that  is,  if  we  did  dismiss  them  they  will  appeal  to 
the  courts  and  be  reinstated."  Bugher  had  known  three  or  four 
of  the  men  personally  for  ten  or  twelve  years  and  believed  them  to 
be  absolutely  honest  and  thought  it  would  be  an  injustice  to  their 
families  to  suspend  them.  He  said,  however,  that  he  would  give 
them  a  fair  trial.  Bugher  had  already  had  a  copy  of  the  Grand 
Jury  minutes  and  studied  them  and  had  asked  the  District  At- 
torney to  assign  one  of  his  assistants  to  prosecute  these  men  in  the 
Police  Department's  trial  court.  After  Bugher  left  the  depart- 
ment he  read  in  the  papers  that  these  men  had  been  suspended  by 
cider  of  the  Mayor,  but  none  of  them  was  dismissed. 

Following  this  conference  and  later  on  the  same  day,  January 
22nd,  Bugher  wrote  the  Mayor,  requesting  that  he  either  be 
permitted  to  run  the  department  without  interference  or  that  the 
Mayor  accept  his  resignation.  On  the  23rd,  the  Mayor  wrote 
asking  for  his  resignation,  which  Bugher  submitted.  The  Mayor 
has  sought  to  make  it  appear  that  Mr.  Bugher' s  resignation  was 
compelled  because  of  his  failure  to  prosecute  the  motor  cycle 
policemen.  It  is  clear,  however,  that  Mr.  Bugher' s  further  tenure 
of  his  office  was  made  impossible  to  any  man  of  character  and  self- 
respect,  by  reason  of  the  Mayor's  continuous  and  demoralizing 
interference  with  the  administration  of  the  department. 


218       INVESTIGATION  OF  AFFAIKS  OF  NEW  YORK  CITY 

The  Experiences  of  Deputy  Commisisoner  O'Grady. 

Mrs.  Ellen  O'Grady  was  appointed  Fifth  Deputy  Police  Com- 
missioner on  January  28,  1918,  and  resigned  on  December  13, 
1920.  She  had  served  as  a  probation  officer  in  Judge  Hylan's 
court  in  East  New  York  and  was  recommended  to  the  Police  Com- 
missioner by  Mayor  Hylan.  Commissioner  Enright  gave  her  no 
instructions  as  to  what  her  duties  were  to  be,  but  her  predecessor 
had  been  doing  welfare  work  on  a  small  scale  and  she  enlarged 
it,  taking  up  an  investigation  of  dancehalls  among  other  things. 
After  she  had  begun  this  investigation,  Inspector  McDonald  was 
sent  by  order  of  the  Police  Commissioner  to  take  this  investiga- 
tion out  of  her  hands.  Thereafter  nothing  further  was  ever  done, 
so  far  as  she  could  learn,  to  correct  serious  conditions  in  these 
dancehalls.  Her  investigations  were  made  in  October  and  No- 
vember and  in  December,  1919,  further  investigation  was  taken 
from  her.  A  few  months  later,  owing  to  published  criticisms, 
Commissioner  Enright  sent  her  a  memorandum  instructing  her  to 
investigate  those  dance  halls.  That  was  in  April  1920.  She 
sent  him  in  reply,  a  written  memorandum  calling  attention  to  the 
fact  that  a  pretty  thorough  investigation  had  been  started  in  No- 
vember and  December,  1919  by  her  and  that  she  had  secured  suf- 
ficient evidence  to  make  arrests  when  Inspector  McDonald  called 
at  her  office  saying  that  the  Commissioner  had  directed  him  to 
handle  the  whole  situation  and  she  had  given  him  all  her  data. 

Some  time  prior  to  December,  1920,  the  mother  of  a  girl  of  17 
complained  to  Mrs.  O'Grady  that  her  daughter  was  remaining 
out  nights  and  coming  home  with  money  that  she  had  not  earned. 
Mrs.  O'Grady  assigned  two  policewomen  to  investigate  the  mat- 
ter. They  brought  this  girl  and  two  others,  one  of  whom  was  also 
under  17,  to  Mrs.  O'Grady's  office.  She  questioned  them  care- 
fully. They  implicated  two  wealthy  men.  While  in  her  office 
she  had  the  girls  telephone  to  the  office  of  one  of  these  men,  verify- 
ing the  fact  that  they  were  known  to  him.  When  she  had  thor- 
oughly investigated  the  matter  and  had  sufficient  evidence  she  pre- 
pared to  make  an  arrest  and  sent  her  policewomen  with  two  of  the 
girls,  who  were  heavily  veiled,  to  the  office  of  one  of  the  men. 
This  was  a  few  days  prior  to  December  23rd.  After  she  had  dis- 
patched her  policewomen  on  this  mission  and  sometime  later  that 
afternoon,  Commissioner  Enright  sent  for  her  and  asked  her  about 
the  case  and  if  she  was  sure  that  she  was  right  in  the  matter.  He 
also  asked  if  they  were  good  girls.  She  replied  by  telling  him 
that  the  girls  were  under  the  age  of  18  and  that  the  men  were 
guilty  of  a  crime.  Shortly  after  she  returned  to  her  office  from 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  219 

Commissioner  Enright's  office  she  received  a  series  of  telephone 
calls  from  her  policewomen.  They  stated  that  they  had  reached 
the  office  of  the  man  in  question  and  had  been  told  that  he  was  in 
and  they  would  have  to  wait,  and  they  had  seen  Ex-Inspector 
Hughes  and  the  Commissioner's  secretary,  Mr.  Hackett  come  into 
the  office  and  that  they  had  been  moved  from  one  room  to1  another 
and  had  found  it  impossible  to  arrest  the  man.  They  did  not  say 
that  Hughes  or  Hackett  ordered  them  not  to  arrest  the  man  but 
stated  that  by  their  words  and  actions  they  prevented  the  arrest. 
Mrs.  O'Grady  determined  to  inform  the  Mayor  about  this  and 
did  so  on  December  23rd,  confirming  it  with  a  written  memoran- 
dum to  the  Mayor.  She  then  sent  the  girls  with  the  policewomen 
to  Chief  Magistrate  McAdoo  to  make  their  complaint  to  him. 
Later,  on  December  23rd,  after  she  had  been  to  the  Mayor's  office 
she  received  a  note  from  Commissioner  Enright  as  follows: 
"  Please  make  a  thorough  investigation  and  take  proper  police 
action  in  connection  with  the  Seaman  case  and  promptly  advise 
me  of  the  result."  On  December  26th,  she  wrote  the  Commis- 
sioner a  full  statement  to  the  effect  that  she  had  already  investi- 
gated the  case  and  mentioned  the  interference  of  Ex-Inspector 
Hughes  and  Secretary  Hackett.  From  that  time  on  there  was  a 
series  of  petty  persecutions  which  continued  until  her  resignation. 
It  was  this  interference  that  ultimately  led  to  Mrs.  O'Grady's 
resignation.  She  had  been  investigating  conditions  in  motion  pic- 
ture houses  for  some  time,  particularly  violations  of  morality,  and 
because  she  discovered  the  conditions  were  very  bad,  she  finally 
wrote  a  statement  for  the  press  telling  of  the  danger  of  motion 
picture  houses,  which  later  was  published  all  over  the  country  and 
in  Europe  and  much  commended.  The  Police  Commissioner  was 
offended  by  this  and  spoke  to  her  about  it,  objecting  because  she 
had  not  consulted  him  before  giving  the  letter  to  the  press. 
Among  other  things,  her  investigation  of  motion  picture  houses 
disclosed  .the  repeated  violation  of  the  law  against  admitting 
minors.  Then  came  the  catastrophe  in  the  Catherine  Street  mo- 
tion picture  house  where  six  little  children  were  killed.  She 
called  her  staff  together  and  said  that  each  of  them  should  feel 
guilty  because  they  had  not  enforced  the  law  strenuously  enough. 
This  was  on  the  morning  of  December  13,  1920.  Later  that  day, 
Captain  Ammon  of  her  staff  came  to  her  saying  that  he  had  been 
in  Commissioner  Enright's  office  when  Mr.  Sidney  Cohen,  a  mo- 
tion picture  exhibitor  was  there.  Captain  Ammon  said,  te  Com- 
missioner Enright  told  me  to  tell  you  that  your  people  should  not 
be  so  strenuous  around  the  motion  picture  houses,  that  when  they 


220       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

find  a  flagrant  violation  of  law  tell  Mr.  Cohen  and  he  will  see  to 
things  or  let  the  captain  of  the  precinct  know,  but  your  people 
are  altogether  too  strenuous.77  She  then  went  into  Commissioner 
Enright's  office,  removed  her  badge,  laid  it  on  his  desk  saying, 
"  I  am  resigning"  and  left  the  room. 

The  Mayor's  domination  of  Commissioner  Enright  in  matters 
of  appointment  to  exempt  positions  and  of  transfers  within  the 
department  is  shown  by  the  following  typical  letters  from  the 
Mayor's  office  to  the  Police  Department: 

From  Assistant  Secretary  Sinnott,  May  10,  1919. 

"  The  Mayor  has  directed  that  I  send  you  the  following 
names  and  addresses: 

"  Miss  Elizabeth  Helm,  473  Bainbridge  Street,  Brooklyn; 
Miss  Hortense  Thompson,  40*3  Sackett  Street,  Brooklyn; 
Miss  Helen  Burns,  588  Jefferson  Avenue,  Brooklyn;  Miss 
Lillian  L.  Lefler,  57  Graves  Street,  Brooklyn;  Mrs.  Ray  BTic- 
oletti,  2812  Second  Avenue,  New  York;  Cora  J.  Ahearn,  344 

East  19th  Street;  Anna ,  411  East  88th  Street, 

Manhattan;  Mary  Gowan,  3079  Decatur  Avenue,  Bronx." 
All  of  these  women  were  appointed  as  policewomen. 

From  Executive  Secretary  Kelly,  January  23,  1920. 

"  The  Mayor  approves  your  request  of  January  20th  for 
permission  to  appoint  to  positions  in  the  exempt  class  the 
following-named  persons : 

"  George  McNulty,  Secretary  to  the  Second  Deputy  Com- 
missioner, at  $2400  per  annum. 

"  Charles  W.  Hunt,  Secretary  to  the  Third  Deputy  Com- 
missioner, at  $2400  per  annum. 

"  Carol  Underbill,  Stenographer  to  the  Fourth  Deputy 
Commissioner,  at  $1550  per  annum. 

"  William  Gillespie,  Secretary  to  the  Police  Commis- 
sioner, at  $4000  per  annum. 

"  Henry  W.  Dearbrn,  Confidential  Investigator,'  at  $1920 
per  annum. 

"  Felix  P.  Nicklas,  Secretary  to  the  Department,  at  $3300 
per  annum." 

From  G rover  Whalen,  June  IS,  1918. 

"  My  dear  Judge.  Is  it  possible  for  you  to  approve  the 
application  for  the  transfer  from  the  Far  Rockaway  Pre- 
cinct to  Rockaway  Beach  of  Patrolman  Joseph  Dwyer,. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  221 

Shield  No.  539  ?     I  understand  that  this  request  has  already 
been  made  through  official  channels." 
The  transfer  was  made  June  21,  1918. 

From  Grover  Whalen,  May  10,  1918. 

"Mr.  John  O'Neill,  No.  4758  of  the  40th  Precinct  Sta- 
tion desires  to  be  transferred  to  the  Telegraph  Bureau  of 
your  Department.  Anything  that  you  may  be  able  to  do 
for  him  will  be  very  much  appreciated  by 

"  Very  truly  yours, 

"  Grover  Whalen." 
From,  Grover  Whalen,  May  16,  1918. 

"  Some  time  ago  I  spoke  to  you  about  Patrolman  O'Neill 
of  the  40th  Precinct  who  is  desirous  of  being  transferred 
to  the  Telegraph  Bureau.  Will  you  be  good  enough  to  ad- 
vise me  if  it  is  possible  to  comply  with  the  request.  Thank- 
ing you  in  advance  *  *  *." 
The  transfer  was  made  May  18,  1918. 

From  Grover  \Vlialen,  August  19,  1918. 

"  I  send  you  a  letter  from  John  J.  Doyle,  1  Kane  Avenue, 
Arverne,  Long  Island,  regarding  the  transfer  to  Rockaway 
of  Patrolman  Eldredge  L.  Warner,  22nd  Precinct.  If  this 
transfer  can  be  made,  I  would  appreciate  it  very  much. 

"  Very  truly  yours, 

"  Grover  A.  Whalen,  Sec't.  to  Mayor." 
The  transfer  was  made  August  22,  1918. 

From  Grover  Whalen,  October  25,  1918. 

"  Is  it  possible  to  transfer  Lieut.  Deering,  stationed  in 
Staten  Island,  (formerly  connected  with  the  Detective  Bu- 
reau) to  Manhattan?  Some  of  our  good  friends  are  in- 
terested in  the  Lieutenant,  and  if  you  can  consistently  grant 
my  request,  the  same  will  be  very  much  appreciated.  Very 
truly  yours,  Grover  A.  Whalen,  Secretary  to  the  Mayor." 

Attached  to  this  letter  was  a  note: 

"My  dear  Grover:  Will  you  kindly  keep  the  Lieut. 
Deering  matter  in  mind?  Sincerely  yours,  Thos.  J.  Mc- 
Manus, October  3,  1918." 

The   request   was   granted.     Thos.    J.    McManus    is    "  The ;? 

McManus,  well  known  as  a  former  State  Senator  and  Tammany 
Leader. 


222       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 


ILLEGAL  POLICE  REINSTATEMENTS. 

The  evidence  shows  that  twenty-nine  police  officers  have,  during 
this  administration,  heen  reinstated  in  violation  of  the  established 
law,  which  forbids  reconsideration  of  applications  for  reinstate- 
ment when  such  an  application  has  once  been  considered  and 
denied.  These  officers  are  still  retained  on  the  force  in  spite  of 
findings  by  both  the  present  Corporation  Counsel  and  the  present 
Commissioner  of  Accounts  that  such  reinstatements  were  illegal. 
One  officer  was  illegal1  y  reinstated  merely  so  that  he  could  be 
retired  on  a  pension. 

Act  of  1907. 

The  first  statute  providing  for  rehearing  of  charges  on  which 
members  of  the  police  force  had  been  dismissed  and  for  reinstate- 
ment was  Chapter  723  of  the  Laws  of  1907,  which  added  Section 
1543-a  to  the  Charter.  It  did  not  permit  rehearing  in  cases  of 
insubordination,  conduct  unbecoming  an  officer  or  member, 
cowardice  or  intoxication. 

Amendment  of  1915. 

This  charter  section  was  revised  in  1915  so  as  to  eliminate 
these  exceptions.  Application  by  men  previously  dismissed  or 
demoted  had  to  be  made  within  one  year  after  the  passage  of  the 
act.  Those  dismissed  or  demoted  after  the  amending  must  apply 
within  one  year  after  dismissal. 

Abolition  of  Board  of  Review. 

Shortly  after  this  amendment  of  1915,  Mayor  Mitchel  created 
a  Board  of  Review  consisting  of  the  Police  Commissioner,  Fire 
Commissioner  and  Corporation  Counsel  to  advise  him  in  relation 
to  applications  under  this  amendment.  On  February  19,  1918, 
the  present  Mayor's  secretary  wrote  Corporation  Counsel  Burr, 
"  The  Mayor  does  not  expect  to  establish  another  Board  of  Review 
for  this  purpose  and  these  functions  will  be  carried  out  by  the 
Police  and  Fire  Commissioners.'7  On  January  12,  1918,  Assist- 
ant Corporation  Counsel  Nelson  advised  the  Mayor  that  such  a 
board  was  without  warrant  of  law,  because  not  created  by  the 
Charter. 

Ordinance  of  July  2,  1918. 

At  a  meeting  of  the  Board  of  Aldermen  on  July  2,  1918,  an 
ordinance  was  passed  purporting  merely  to  transfer  the  provisions. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  223 

of  Charter  Section  1543 a  to  the  Code  of  Ordinances,  but  in  fact 
permitting  applications  thereunder  to  be  made  within  a  year  after 
the  enactment  of  the  ordinance  instead  of  within  a  year  after  the 
enactment  of  the  statute.  The  Mayor  approved  this  ordinance  on 
July  26,  1918,  but  it  was  thereafter  held  invalid  by  the  Corpora- 
tion Counsel,  in  an  opinion  rendered  November  29,  1918. 

Executive  Board  Created. 

Thereafter  an  Executive  Board  in  the  Police  Department  was 
created  with  a  committee  thereof  known  as  the  Laws  and  Regu- 
lations Committee,  to  which  such  applications  for  rehearing  were 
referred. 

Advisory  Committee  Appointed. 

Under  date  of  December  6,  1920,  the  Mayor  wrote  the  Police 
Commissioner  referring  to  the  Commissioner  of  Accounts'  inves- 
tigation of  applications  for  reinstatement,  and  stating  that  the 
Mayor  had  concluded  to  appoint  an  Advisory  Committee  to  pass 
upon  these  applications,  consisting  of  the  Corporation  Counsel, 
Fire  Commissioner  and  Chief  Inspector  of  the  Police  Department. 

Following  a  public  charge  that  numerous  dismissed  policemen 
had  been  illegally  reinstated,  the  Mayor  directed  the  Commis- 
sioner of  Accounts  to  investigate. 

The  f(  Functus  Officio  "  Opinion. 

On  November  24,  1919,  the  Commissioner  of  Accounts 
requested  an  opinion  from  the  Corporation  Counsel  in  the  case 
of  Patrolman  George  F.  Frey  pointing  out  that  Mayor  Mitchel 
had  denied  Frey's  application  for  reinstatement,  after  which  he 
applied  to  Mayor  Hylan  for  a  rehearing  and  the  Mayor  consented 
to  a  rehearing  and  Patrolman  Frey  had  been  reinstated.  The 
Commissioner  of  Accounts  asked  a  ruling  particularly  upon 
whether  the  denial  by  Mayor  Mitchel  made  the  matter  "res 
adjudicata,"  stating  that  this  question  would  affect  a  number  of 
similar  cases  which  the  Commissioner  of  Accounts  was  exam- 
ining. Under  date  of  March  4,  1920,  the  Corporation  Counsel 
replied  in  part  as  follows :  <{  I  incline  to  the  view  that  if  a  Mayor 
denies  an  application  of  a  uniformed  member  of  either  the  Police 
Department  or  the  Fire  Department  for  a  rehearing,  under  the 
provisions  of  Section  1543 a  of  the  Charter,  he  is  functus  officio 
and  neither  he  nor  his  successor  thereafter  would  have  power  to 
reconsider  such  determination  and  grant  the  person  concerned  a 


224       INVESTIGATION  OF  AFFAIRS  OF  NEW  YOKK  CITY 

rehearing.'7  In  spite  of  this  opinion  Patrolman  Frey  is  still  a 
member  of  the  police  force.  That  the  Police  Department  had 
knowledge  of  this  opinion  is  shown  by  the  fact  that  on  May  31, 
1920,  the  Secretary  of  the  Department  wrote  former  Patrolman 
Frederick  Blummert,  referring  to  the  Corporation  Counsel's 
opinion  as  reason  for  denying  application  for  rehearing,  stating 
that  the  Police  Commissioner  was  without  jurisdiction,  because  a 
previous  rehearing  had  been  granted  and  dismissal  affirmed. 

Illegal  Reinstatements. 

Of  the  38  cases  of  reinstatement  under  this  section  of  the 
charter,  29  were  illegal  under  the  above  opinion.  Four  of  these 
reinstatements  took  place  after  the  opinion  had  been  rendered. 
Six  others  took  place  after  a  rehearing  had  once  been  granted 
and  dismissal  affirmed.  In  nineteen  of  these  cases  reinstatement 
was  granted  after  rehearing  had  once  been  denied. 

Reinstated  after  ff  Functus  Officio  "  Opinion. 

These  four  cases  are  Joseph  Calcaterra,  Frank  P.  Mallon, 
Edward  J.  Donne1  ly  and  Thomas  J.  Coyne.  Taking  the  Calca- 
terra case  as  an  example,  it  appears  that  he  was  dismissed  on 
December  7,  1915,  for  being  intoxicated  in  a  dormitory  of  the 
Station-house  and  for  discharging  a  revolver  at  a  patrolman.  On 
August  2,  1916,  he  applied  to  Mayor  Mitchel  for  a  rehearing, 
which  was  denied  on  November  21,  1916.  On  June  20,  1918, 
he  applied  to  Mayor  Hylan  for  a  rehearing.  On  November  13, 
1919,  the  Police  Commissioner  wrote  the  Mayor  recommending 
a  rehearing  be  granted.  On  January  5,  1920',  the  Commissioner 
of  Accounts  wrote  the  Mayor  stating  that  although  application 
was  made  to  Mayor  Mitchel  "  no  action  appears  to  have  been 
taken  thereon"  -this,  in  spite  of  the  fact  that  a  copy  of  the 
letter  of  November  21,  1918,  denying  such  application,  was  on 
file  in  the  Mayor's  office,  and  had  been  delivered  to  the  Commis- 
sioner of  Accounts  to  facilitate  his  study.  Calcaterra  was  there- 
upon granted  a  rehearing,  was  reinstated  and  is  still  a  member 
of  the  Police  force. 

Reinstatement  after  Dismissal  Affirmed. 

The  six  officers  who  have  been  reinstated  in  spite  of  the  fact 
that  their  previous  rehearing  affirmed  the  dismissal  are  John  A. 
DoTan,  John  P.  Murtha,  A.  W.  Bossard,  J.  E.  Brady,  Herman  W. 
Schieb  and  Sergeant  Everett  Lewis.  The  Dolan  case  may  'be 
cited  as  an  example  of  this  class.  Dolan  was  placed  on  trial  on 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  225 

August  9,  1915,  before  Deputy  Commissioner  Godlej  for  con- 
duct unbecoming  an  officer,  neglect  of  duty  and  violations  of  the 
rules.  It  was  charged  that  he  and  another  officer  had  endeavored 
to  extort  payment  of  $25  from  one  McNavens  under  fear  of 
arrest  and  did  actually  obtain  from  him  a  $5  payment.  He  was 
found  guilty  and  dismissed  and  brought  certiorari  proceedings  in 
which  his  dismissal  was  affirmed.  He  applied  to  Mayor  Mitchel 
on  July  27,  1916  for  a  rehearing.  It  was  granted  and  the  dis- 
missal was  confirmed  upon  such  rehearing  on  December  20,  1917. 
He  applied  again  to  Mayor  Hylan  for  a  rehearing.  The  Mayor 
consented  on  October  23,  1918.  The  rehearing  took  place  October 
31,  1918  and  on  February  3,  1919  Dolan  was  reinstated. 

Reinstatements  After  Rehearing  Denied. 

The  nineteen  officers  who  were  reinstated  before  the  "  functus 
officio  "  opinion,  but  after  an  application  for  a  rehearing  had  been 
denied,  are  John  A.  Kaht,  A.  J.  Farley,  Officer  McGeraid,  G.  A. 
Fortune,  T.  P.  Madigan,  Patrick  McHugh,  Hugh  Gallagher, 
Theodore  Unger,  James  J.  Sheehy,  M.  R.  Reardon,  W.  J.  Raleigh, 
John  Walsh,  John  Ryan,  Thomas  Dent,  Francis  J.  Mang,  Joseph 
Storch,  George  F.  Frey,  J.  F.  McAuliffe  and  Charles  L.  Knch. 
The  case  of  Officer  Kaht  may  be  taken  as  an  example  in  this  class. 
He  was  a  sergeant,  but  on  June  16,  1910  was  reduced  to  the  rank 
of  patrolman.  A  bill  to  permit  the  city  authorities  to  rehear  the 
charges  against  him  was  passed,  but  vetoed  by  the  Governor. 
Kaht  then  brought  certiorari  proceedings  which  failed.  He 
applied  to  Mayor  Mitchel  on  April  14,  1915,  for  a  rehearing, 
which  was  denied  on  July  14,  1916.  After  the  special  legislation 
attempted  in  1918  failed,  he  applied  to  Mayor  Hylan  for  a  rehear- 
ing. On  July  24,  1918,  .the  Mayor  referred  his  application  to 
the  Police  Department.  On  March  21,  1919,  the  Police  Commis- 
sioner approved  the  recommendation  for  such  rehearing.  The 
rehearing  was  held  and  Kaht  was  reinstated  to  the  rank  of 
sergeant  on  July  9,  1919.  He  was  then  retired  on  January  26, 
1921.  In  this  case  also  the  Commissioner  of  Accounts,  in  his 
study  in  1920,  reported  that  "no  action  appears  to  have  been 
taken  on  this  application"  although  a  copy  of  letter  of  July  14, 
1916,  was  on  file  in  the  Mayor's  office  and  had  been  delivered  to 
the  Commissioner  of  Accounts. 
8 


226       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

Maker  Case. 

The  case  of  William  F.  Maher  is  remarkable  because  he  was 
reinstated  as  a  Lieutenant  on  March  5,  1918,  while  he  was  em- 
ployed as  supervisor  of  the  Property  Protection  Bureau  of  the 
United  Fruit  Company,  and  was  retired  on  March  27,  1918  on 
a  pension,  receiving  a  salary  from  both  sources  from  the  5th  of 
March  to  the  27th  of  March.  He  was  thus  reinstated  merely  that 
he  might  be  retired.  He  discharged  no  police  duty  in  this  interim,, 
but  was  rendering  service  to  a  private  corporation. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  227 


DEMORALIZATION  OF  THE  QUARTERMASTER'S 

DIVISION. 

The  Committee's  investigation  of  the  Quartermaster's  Division 
of  the  Police  Department  has  disclosed  that  the  business  side  of 
that  department  has  been  conducted  wastefully  and  in  flagrant 
violation  of  the  law  requiring  that  public  work  and  .supplies,  cost- 
ing in  excess  of  $1,000,  be  furnished  by  contract  and  after  com- 
petitive bidding.  Payroll  costs  have  been  increased.  Members 
and  officers  of  the  uniformed  force  have  been  placed  in  charge 
of  work  for  which  civilians  are  better  fitted.  Purchases  of  more 
than  $1,000  have  been  split,  for  the  purpose  of  avoiding  compe- 
tition and  enabling  awards  to  be  made  on  open  market  order  to 
favored  concerns.  Prices  paid  were  often  extravagant.  Compe- 
tition was  simulated  by  alleged  "  telephone  bids,"  and  in  some 
instances  by  forged  bicls.  It  was  disclosed,  in  addition,  that  the 
private  motor  cars  of  favored  individuals  were  maintained  at 
public  expense  and  that  stolen  automobiles,  recovered  by  the 
police,  were  used  for  long  periods,  by  persons  other  than  their 
owners,  at  public  expense  for  gasoline  and  oil. 

The  evidence  is  as  follows : 

The  Bureau  of  Repairs  and  Supplies  now  called  the  Quarter- 
master Division  of  the  Police  Department  had  on  January  1, 
1914,  a  total  of  32  employees  on  the  administrative  side  at  a 
total  annual  cost  of  $50,500.  Had  the  personnel  of  th^  Bureau 
remained  the  same  until  January  1,  1918,  an  increase  for  respec- 
tive grades  during  that  time  would  have  made  the  total  salary 
roll  $4,000  more  or  $54,500.  However,  due  mainly  to  a  reorgani- 
zation by  which  civilian  employees  were  .substituted  for  members 
of  the  uniform  force,  the  personnel  on  January  1,  1918,  was  33 
employees  at  a  total  cost  of  only  $49,500  on  the  administrative 
side. 

After  1918  due  mainly  to  a  reversion  to  the  old  custom  of 
employing  members  of  the  uniformed  force  in  this  bureau  the  cost 
of  operation  steadily  mounted  each  year.  As  of  June  30,  1919, 
there  were  38  employees  at  an  annual  cost  of  $62,380.  On  Janu- 
ary 1,  1920',  there  were  36  employees  costing  annually  $66,160. 
On  Juno  30,  1920.  there  were  44  employees  at  a  total  annual  pay- 
roll of  $83,190.  On  January  1,  1921,  there  were  37  incumbents 
at  a  total  annual  cost  of  $85,983.  Of  the  37  employees  on  this 


228       INVESTIGATION  OF  AFFAIRS  OF  NEW  YOKK  CITY 

latter  date  twelve  were  civilians.  There  were  one  captain,  two 
lieutenants,  one  sergeant  and  21  patrolmen. 

This  increase  in  cost  is  to  be  contrasted  with  Commissioner 
Enright's  promise  to  Mayor  Hylan  under  date  of  March  27,  1918, 
when  he  stated,  "  unless  I  am  mistaken  I  will  be  able  to  save 
one-half  a  million  dollars  from  the  budget  of  1918  and  I  hope 
to  ask  a  substantial  reduction  in  the  budget  of  next  year."  The 
budget  for  the  Police  Department  for  1918  was  $19,394,613. 
The  total  expenditures  for  that  year  were  $19,914,879.  The 
budget  for  1919  instead  of  being  lower  as  promised  was  $20,662,- 
219  showing  an  increase  of  $1,300,000  over  the  budget  of  1918. 

On  October  14,  1920,  the  Mayor's  office  wrote  the  Police  Com- 
missioner that  on  January  1,  1921,  the  purchase  of  equipment, 
materials  and  supplies  for  the  Police  Department  would  be  made 
by  the  Board  of  Purchase  and  that  therefore  a  list  of  names  of 
employees  who  would  no  longer  be  needed  in  the  Police  Depart- 
ment and  could  be  transferred  to  the  Board  of  Purchase,  should 
be  prepared.  As  a  matter  of  fact  only  one  person  was  so  trans- 
ferred and  he  was  a  bookkeeper  at  a  salary  of  $1,800. 

In  1918  there  was  a  reversion  to  the  previous  system  of  having 
a  member  of  the  uniformed  force  at  the  head  of  the  Quarter- 
master Division.  The  last  member  of  the  uniformed  force  to  head 
this  division  had  been  Lieutenant  Enright.  He  was  succeeded  by 
Purchasing  Agent  McDermott.  By  special  order  No.  71  in  the 
latter  part  of  1918,  Lieutenant  William  T.  Davis,  who  was  then 
Treasurer  of  the  Lieutenants'  Benevolent  Association,  of  which 
Lieutenant  Enright  was  president,  was  transferred  to  the  Bureau 
of  Repairs  and  Supplies.  As  no  order  had  been  issued  counter- 
manding Mr.  McDermott' s  authority  there  was  a  dual  control 
until  the  budget  of  1919  took  effect,  in  which  the  position  of  Pur- 
chasing  Agent  was  left  unprovided.  Lieutenant  Davis  has  since 
been  superseded  by  the  present  head  of  the  Quartermaster  Divi- 
sion, Captain  Charles  A.  Zanes.  The  duties  of  the  head  of  this 
division  are  those  of  a  business  man.  There  is  nothing  in  the  ex- 
amination for  a  position  in  the  uniformed  force  which  tests  can- 
didates' familiarity  with  such  work  as  this.  On  the  other  hand, 
the  civil  service  examination  for  purchasing  agent  is  a  test  of  a 
candidates'  familiarity  with  supplies,  methods  of  purchasing, 
storing  and  accounting  for  supplies,  etc.,  which  knowledge  would 
be  needed  in  administering  such  division. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  229 

The  budget  for  1918  had  provided  for  a  civilian  staff  to  take 
care  of  auto  repairing  and  auto  machine  work.  Nevertheless, 
members  of  the  uniformed  force  were  withdrawn  from  their  duties 
as  policemen  and  assigned  to  this  type  of  work  and  other  work  in 
the  Bureau  of  Repairs  and  Supplies.  In  19 17  and  1918,  only 
two  lieutenants  and  one  acting  sergeant  and  five  patrolmen  had 
been  assigned  to  this  division,  but  there  are  now  only  12  civilians, 
there  being  one  captain,  two  lieutenants,  one  sergeant  and  21 
patrolmen.  A  method  of  cost  and  control  records  has  been  abol- 
ished. Civilian  caretakers  and  stores  foremen  have  been  replaced 
by  members  of  the  uniformed  force. 

The  custom  of  receiving  sealed  bids  for  open  market  orders 
has  been  done  away  with.  Telephone  bids  are  received  on  vari- 
ous items  of  work.  Charter  Section  419  is  continuously  violated 
in  that  requisitions  for  supplies  in  excess  of  $1,000  are  split  up 
so  as  to  be  purchased  on  open  market  orders  instead  of  by  con- 
tract as  the  law  provides.  Examples  of  the  violation  of  this 
charter  provision,  of  the  improper  use  of  telephone  bids  and  of 
the  purchase  of  supplies  from  favorite  bidders  without  proper 
competition,  are  described  below. 

For  example,  telephone  bids  were  employed  in  the  purchase  of 
nags  for  the  Police  Parade  in  1919.  Belts,  sockets  and  shoulder 
straps  were  needed  with  the  flags,  but  in  order  to  purchase  the 
goods  on  an  open  market  order  instead  of  a  contract,  two  requi- 
sitions were  issued,  one  at  a  cost  of  $836.25  and  the  other  $453.75. 
making  a  total  of  $1.290.  Both  orders  were  awarded  to  the  Eagle 
Regalia  Company.  Although  the  parade  wa,s  held  on  May  lYth 
the  order  was  not  approved  by  the  Deputy  Commissioner  until 
May  23rd. 

Similar  violations  were  discovered  in  the  ordering  of  printing 
for  the  Police  Department,  Oberly  &  Newell,  being  in  this  case 
the  favorite  bidder.  Eor  example,  bids  were  requested  for  the 
binding  of  copies  of  departmental  regulations.  Oberly  &  Newell 
was  by  far  the  lowest  bidder,  but  shortly  after  the  order  was  issued 
to  them  it  was  cancelled,  an  entry  being  made  on  the  Police 
Department  records  by  Captain  Davis  to  the  effect  that  Oberly  & 
Newell  had  notified  him  that  they  would  be  unable  to  fill  the  order 
at  the  price  quoted.  Thereafter  bids  were  again  solicited  for  the 
same  work.  This  time  instead  of  bidding  $398.50  as  formerly, 
Oberly  £  Newell  bid  $926.70.  They  were  still  the  low  bidder 
but  this  time  none  of  the  former  bidders,  except  Oberly  &  Newell, 


230       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

was  asked  to  bid.  Later  evidence  showed  that  the  other  bids 
were  not  submitted  in  good  faith  and  that  they  were  not  from 
companies  who  are  equipped  to  do  this  work. 

The  salesman  for  Oberly  &  Newell  and  the  salesman  for  the 
Warren  Press,  one  of  the  apparent  bidders  in  competition  with 
Oberly  &  Newell  are  brothers.  The  Warren  Press  never  did  a 
job  for  the  Police  Department  and  could  not  do  a  large  binding 
job  if  they  got  it  and  would  have  to  send  it  out  to  some  other 
concern.  The  Borland  Printing  Company  which  appears  as  an 
apparent  competitor  with  Oberly  &  Newell  for  this  work  could 
not  have  done  this  type  of  work  if  they  had  received  it  and 
would  not  under  any  circumstances  bid  against  Oberly  <fe  Newell 
for  this  work.  The  alleged  bid  was  fictitious  and  unauthorized 
nor  was  it  made  over  the  telephone.  On  several  bids  the  name 
of  S.  Weinstein  of  the  Borland  Printing  Company  appears.  Wein- 
stein  testified  that  in  no  such  instance  was  his  alleged  signature 
genuine.  He  and  his  partner  had  a  conference  in  reference  to 
the  advisability  of  bidding  for  work  for  the  Police  Department 
and  had  decided  definitely  that  they  could  not  do  this  as  they 
would  he  competing  with  Oberly  &  Newell  from  whom  they 
received  much  work. 

In  printing  programs  for  the  dedication  of  the  John  F.  Hylan 
Police  Boat,  the  Warren  Press  is  reported  as  having  given  a 
telephone  bid,  although  their  representative  testified  that  this 
was  not  their  custom  and  they  could  not  have  done  this  type  of 
work  had  they  received  it.  Again  the  charter  was  violated  by 
splitting  a  requisition  to  avoid  a  contract  and  both  times  the 
awards  were  made  to  Oberly  &  Newell. 

A  study  of  the  prices  when  there  was  real  competition  as 
against  the  prices  charged  the  Police  Department  by  Oberly  & 
Newell  when  there  was  only  fictitious  competition  shows  that 
in  the  latter  case  the  prices  were  very  much  higher.  For  ex- 
ample, an  order  of  letterheads,  where  there  was  real  competition 
cost  at  the  rate  of  $4.36,  whereas  when  Oberly  &  Newell  secured 
the  order  under  fictitious  competition  for  a  similar  order  of  let- 
terheads the  rate  was  $8.97.  In  another  instance  involving  the 
purchase  of  stationery  the  unit  price  when  there  was  real  com- 
petition was  $6.50  per  thousand,  whereas  the  price  for  the  pur- 
chase of  similar  supplies  when  awarded  to  Oberly  &  Newell 
without  genuine  competition  was  $15.75,  an  increase  of  125 
per  cent. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  231 

The  same  situation  was  shown  to  exist  in  all  branches  of  the 
work  of  the  Quartermaster  Division,  i.  e.,  frequent  violation  of 
Charter  Section  419  by  purchasing  on  open  market  orders  when 
the  law  required  a  contract,  using  telephone  bids  and  award- 
ing orders  to  favorite  bidders  at  an  exorbitant  price  without  real 
competition.  Examples  which  show  how  general  this  practice 
was  throughout  all  branches  of  the  work  of  the  division  are  the 
purchase  of  cork  floors  for  the  Trial  Room  at  Police  Headquart- 
ers, purchase  of  ornamental  iron  partitions  to  be  installed  at 
Police  Headquarters,  purchase  of  horses,  repairs  to  police  sta- 
tion houses,  plumbing  and  steam  heating. 

These  violations  in  connection  with  the  purchase  of  auto  sup- 
plies were  so  glaring  as  to  require  special  mention.  In  the 
first  place  it  was  shown  that  the  motor  equipment  of  the  Police 
Department  was  increased  tremendously  from1  1918  to  1921.  Tn 
the  semi-annual  report  of  the  Police  Commissioner  for  the  first 
lialf  of  the  year  1918  he  represented  to  the  Mayor  that  drastic 
reductions  in  the  department's  motor  equipment  had  been  and 
would  be  made.  Under  the  heading  of  "Automobiles  Discon- 
tinued "  appears  this  statement :  "  Seventeen  automobiles  were 
dispensed  with,  a  decrease  of  38  per  cent.  The  upkeep  of  these 
machines  would  amount  to  $6,375.  In  the  first  six  months,  a 
decrease  of  38  per  cent ;"  and  then  under  the  heading,  "  Bicy- 
cles and  Motorcycles  Discontinued "  appears  a  further  state- 
ment, "  On  January  1,  1918,  there  were  on  hand  283  motor- 
cycles and  on  June  30th,  277,  a  decrease  of  6  per  cent,"  How 
untrue  was  this  report  and  these  promises  is  indicated  by  the 
following  summary  of  motor  equipment  purchased  for  the  period 
1918  to  1921,  inclusive,  by  the  Police  Department: 

40  Passenger  automobiles  at  a  cost  of $48,075.  57 

276  Motorcycles  at  a  cost  of 120,718.20 

21  Patrol  "wagons  at  a  cost  of 21,937.68 

6  Motor  trucks  at  a  cost  of 20,708.00 

or  a  total  expenditure  for  motor  equipment  during  this  period 
of  $211,439.45. 

Of  course,  it  took  a  vast  amount  of  equipment,  supplies,  auto- 
mobile tires-,  oil,  gasoline,  etc.,  to  maintain  such  a  fleet  of  auto*- 
mobiles  and  similar  vehicles.  During  the  administration  of  the 
purchasing  agent  these  supplies,  wherever  possible  were  purchased 
on  contract  by  public  letting.  Tires  were  bought  that  way  with 
very  few  exceptions.  The  practice  of  purchasing  such  supplies 


232       INVESTIGATION  OF  AFFAIES  OF  NEW  YORK  CITY 

on  contract  was  deliberately  discontinued  during  1918  and  1919'. 
In  1918,  Mr.  McDermott,  who  was  then  purchasing  agent,  pre- 
pared a  schedule  showing  the  number  of  automobile  tires  that 
would  be  required  to  operate  the  motor  vehicles  for  the  bal- 
ance of  1918  and  submitted  this  schedule  to  Lieut.  William  T. 
Davis,  who  was  then  jointly  in  charge  of  the  division  with 
Mr.  McDermott.  With  this  schedule  the  purchasing  agent  sub- 
mitted a  form  of  bid  to  be  sent  to  a  list  of  automobile  supply 
concerns.  After  several  days  this  schedule  was  returned  with 
a  slip  attached  to  it  bearing  the  entry,  "  Canceled,  W.  T.  D." 
This  slip  canceled  a  proposal  for  185  tires  of  miscellaneous  size 
and  a  quantity  of  inner  tubes  which  the  Purchasing  Agent  pro- 
posed to  buy  on  contract,  as  required  by  the  Charter  and  accord- 
ing to  the  previous  custom.  Lieutenant  Davis  said  that  he  was 
simply  carrying  out  the  orders  of  the  Commissioner,  who  did 
not  wish  to  enter  into  any  contract  for  these  supplies,  but  wanted 
to  continue  buying  from  time  to  time  "  in  order  that  they  might 
be  friendly  with  the  dealers."  The  concern  from  which  most 
of  these  supplies  were  purchased  during  1918  to  1921  was  the 
Oriental  Rubber  and  Supply  Company  in  Brooklyn  and  an- 
other concern  known  as  the  Ready  Auto  Supply  Company.  As 
a  result  of  this  more  expensive  method  of  purchasing  there  was 
included  in  the  budget  of  1919  for  the  Police  Department, 
$40,000  for  motor  vehicle  supplies  and  $39,000  for  motor  ve- 
hicle equipment.  For  tires  alone,  this  meant  an  appropriation 
of  $25,000. 

It  had  been  the  custom  under  the  administration  of  the  pur- 
chasing agent  to  dispose  of  old  equipment  in  part  payment  for 
new,  as  permitted  under  section  1553  of  the  Charter.  This  cus- 
tom also  was  terminated  under  the  administration  of  Lieutenant 
Davis. 

The  cars  supplied  with  such  equipment  and  maintenance  on 
January  1,  1921,  listed  as  official  cars  belonging  to  the  Police 
Department  or  to  the  City  of  New  York  and  maintained  by  the 
Police  Department,  included,  according  to  the  records  subpoenaed 
from  the  department,  33  passenger  automobiles.  The  former  cus- 
tom had  been  to  purchase  tires  by  contract  according  to  standard 
specifications  which  provided  for  a  mileage  guarantee.  A  study 
made  of  purchases  of  tires  from  1918  to  1921  indicated  that  while 
the  orders  frequently  called  for  a  guarantee  of  five  or  six  thou- 
sand miles,  there  is  nothing  to  show  that  the  guarantees  were 
observed.  Only  89  tire  tags  could  be  produced  by  the  depart- 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE 


233 


ment  for  these  years.  These  tags  would  show  the  car  to  which 
the  tire  was  issued  and  the  mileage  secured  from  that  tire.  The 
officer  in  charge  of  the  Quartermaster  Division  stated  that  they 
were  unable  to  find  any  more  of  the  tags  and  in  1920  and  1921 
the  tags  had  been  destroyed  "  as  they  did  not  think  they  were 
of  any  further  use."  The  purpose  of  keeping  automobile  tire 
tags  is,  of  course,  so  that  a  contractor  can  be  required  to  make 
good  on  the  mileage  that  the  tire  has  failed  to  give.  Most  of  the 
orders  for  tires  for  the  Oriental  Rubber  &  Supply  Company 
include  a  statement  that  the  casings  are  to  be  guaranteed  for 
5,000  miles.  There  is  no  indication  that  any  credit  was  ever  allowed 
for  casings  that  failed  to  give  this  mileage.  In  one  instance  an 
attempt  was  made  to  justify  purchase  of  tires  without  requesting 
any  bids  whatever  by  stating  on  the  requisition  "  the  reason  why 
bids  are  not  had  on  these  casings  is  as  follows :  The  Oriental  is  the 
only  company  of  its  kind  that  gives  an  unconditional  guarantee 
of  5,000  miles  and  this  department  never  has  any  trouble  with 
these  casings  as  to  service,  etc."  This  was  false  as  the  Pennsyl- 
vania Rubber  Company  gives  a  6,000  mile  guarantee,  the  United 
States  Rubber  Company,  the  Sterling  Tire  Company  and  others 
give  a,  5,000  mile  guarantee. 
Private  Cars  Maintained  by  Police  Department. 

The  Police  Department  was  requested  to  furnish  a  list  of  auto- 
mobiles not  owned  by  the  City  of  New  York  which  it  main- 
tained at  Police  Department  expense.  There  are  a  total  of  28 
privately  owned  automobiles  maintained  by  the  Police  Depart- 
ment. The  list  is  as  follows: 


Police 
Make  Number 

Oldsmobile   50 

Buick    49 

Reo    51 

Ford    52 

Cadillac    66 

Dodge    68 

Chandler    70 

Chevrolet    76 

Overland 77 

Buick    79 

Ford    102 

Ford    103 

Buick    113 

Pape    11,7 

Liberty   118 

Ford    119 

Ford    61 

Ford    101 

Ford    .  ..120 


Private  Owner 
Sgt.  Gegan,  Det.  Bureau 
Det.  Riley 

70  Pre.  Capt.  Northrup 
Det.  Kaufman  12  DD 
Chaplain  Coogan 
Chaplain  Ivie 
Chaplain  Brocken 
Det.  Grobau  14  DD 
Det.  Raeburn  14  DD 
Capt.  Mullarkey   14  DD 
Det.  Hayden 
Det.  Truck  Squad 
Inspector  Belton 
Spec.  Dep.  Com.  Shaw 
Spec.  Dep.  Com.  Shaw 
Det.  Meyer  47  Prec.  DB 
Det.  Caffrey  5  Prec.  DB 
Patrolman   Confrey,  2   Insp.  Dist. 
Insp.    14th  Dist. 


}•  Gas   ar.d 
|       Oils 


234       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

Police 
Make  Number 

Studebaker  67  Lieut.  O'Brien 

Packard    107  Underbill 

Packard    108  Enright 

Packard    109  Hylan  —  personal  }  Equipment  and 

Oldsmobile   81  Deputy  Faurot  Maintenance 

Dodge    114  Inspector  Thor 

Ford    55  Lieut.  Park 

Cadillac    78  Hylan-Sinnott,   Private 

It  will  be  noted  that  some  of  them  received  complete  equip- 
ment and  maintenance  and  others  merely  gasoline  and  oil  as  in- 
dicated. It  was  not  possible  for  the  year  1|919  to  secure  com- 
plete data  as  to  the  cost  of  this  maintenance,  due  to  the  fact 
that  many  of  the  records  were  not  available.  'More  complete 
records  could  be  obtained  for  1920  showing  that  for  seven  cars 
only  out  of  the  28  their  maintenance  cost  the  city  in  1920, 
$11, 954.01.  All  of  them  received  full  maintenance  consisting  of 
repairs,  tires,  gasoline  and  oil.  Included  in  these  private  cars 
maintained  at  city  expense  were  the  Mayor's  private  car  (this 
was  later  claimed  to  be  an  error  made  in  the  Police  Department), 
and  also  two  cars  belonging  to  one  of  the  special  or  honorary- 
deputy  commissioners  of  the  Police  Department,  Commissioner 
Enright's  private  car,  which  was  given  to  him  by  Deputy  Com- 
missioner Harriss  was  not  only  supplied  at  city  expense  with 
maintenance  and  equipment  but  with  a  winter  top  "  demountable 
sedan,  full  doors  at  a  cost  of  $865,"  which  bill  was  paid  by  the 
Police  Department  as  was  also  a  bill  issued  on  an  emergency 
order  form  in  favor  of  Wanamakers  for  four  linen  dusters,  four 
summer  robes,  three  pair  of  goggles  and  one  pair  of  field  glasses 
at  a  cost  of  $85,  for  the  same  automobila 
Gasoline  Issued  for  Stolen  Cars. 

The  receipts  which  must  be  signed  by  members  of  the  force 
drawing  gasoline  and  oil  from  departmental  supply  were  sub 
poenaed  and  examined  for  the  years  1919  and  1920.  Only  a  portion 
of  the  receipts  for  these  years  could  be  found.  In  many  instances 
the  receipt  indicated  that  the  gasoline  or  oil  had  been  issued  to 
a  stolen  car  which  had  been  recovered  by  the  department.  These 
receipts  for  1919  and  1920  were  segregated  and  approximated  250 
in  number,  these  being  only  a  portion  of  receipts  issued  for 
gasoline  and  oil  for  stolen  cars  during  those  years,  as  receipts  for 
only  a  few  months  were  available.  For  the  year  1919  a  tabulation 
of  such  receipts  shows  one  Buick  car  receiving  gasoline  and  oil 
during  five  months,  a  total  of  1,829  gallons  of  gasoline  and  216 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  235 

quarts  of  oil  signed  for  by  a  member  of  the  force,  stating  that 
the  car  was  a  stolen  one  which  had  been  recovered.  There  was 
also  a  Dodge  car  which  received  gasoline  and  oil  in  May,  June, 
August  and  September  1919,  amounting  to  156  gallons  of  gasoline 
and  14  quarts  of  oil.  A  Packard  car  received  gasoline  and  oil 
in  May  and  September  in  that  year  totaling  58  gallons  of  gasoline 
and  9  quarts  of  oil.  A  similar  record  was  made  of  the  gasoline 
and  oil  issued  to  the  following  cars:  Hupmobile,  Oldsmobile, 
Cadillac,  Ford,  Hudson,  Jordan,  Chandler  and  Studebaker.  The 
total  distribution  of  gasoline  and  oil  to  stolen  cars  during  those 
five  months,  May  to  September,  being  4,060  gallons  of  gasoline 
and  516  quarts  of  oil.  On  the  basis  of  30  cents  a  gallon  for 
gasoline  and  14  cents  per  quart  for  oil  the  cost  to  the  City  of 
New  York  for  maintaining  these  cars  during  these  months  was 
$1,218,  for  gasoline  and  $82.50  for  oil.  The  department  main- 
tains depositories  under  the  charge  of  the  Property  Clerk  to  which 
these  cars  should  have  been  immediately  taken.  There  is  one  in 
each  borough  and  the  gasoline  to  carry  these  cars  to  the  point 
of  recovery  in  the  City  of  New  York  to  the  Department  Deposi- 
tory would  have  been  a  very  slight  expense.  The  withdrawals  of 
gasoline  and  oil  were  particularly  heavy,  generally  speaking,  on 
a  Saturday  or  before  a  holiday. 


236       INVESTIGATION  OF  AFFAIES  OF  NEW  YORK  CITY 


1918  POLICE  GAMES. 

The  1918  police  games  were  held  August  24  and  31,  1918,  for 
the  purpose  of  raising  funds  to  defray  the  cost  of  uniforming 
and  equipping  the  volunteer  police  reserves  organized  to  take 
the  place  of  regular  members  of  the  force  who  had  been  or  would 
be  drafted  for  military  service. 

According  to  an  official  report,  dated  December  31,  1920,  the 
receipts  on  account  of  the  1918  games  amounted  to  $384,615.04, 
of  which  $374,012.04  was  from  the  sale  of  tickets.  According 
to  the  records  submitted  to  the  Committee,  no  uniforms  were 
purchased  until  after  the  Armistice  and  as  late  as  1921  money 
was  still  being  spent  to  equip  women  members  of  the  Police 
Reserves. 

Eunds  collected  from  the  public  for  patriotic  and  charitable 
purposes,  especially  when  collected  by  an  official  agency  like  the 
Police  Department,  should  be  safeguarded  in  every  way.  The 
Committee's  investigation  into  the  finances  of  the  1918  games  dis- 
closes a  condition  reflecting  great  discredit  upon  those  officials  of 
the  Police  Department  charged  with  the  responsibility  for  the 
distribution  and  sale  of  tickets. 

This  work  was  performed  by  a  committee  consisting  of  Deputy 
Commissioner  Frederick  A.  Wallis,  Treasurer;  Special  Deputy 
Commissioner  Allan  A.  Ryan,  Vice-Chairman ;  Stephen  A.  Rudd, 
Secretary;  Vincent  E.  Einn,  Assistant  Secretary;  Lieutenant 
Charles  A.  Zanes,  Assistant  Secretary ;  Patrolmen  Clay,  Bosch  and 
Crombholtz.  The  Committee's  examination  of  these  persons  and 
others  disclosed  the  facts 

1.  That   the   original   records  covering  the  printing  and 
sale  of  tickets  had  been  destroyed  or  lost. 

2.  Thnt  a  proper  audit  of  receipts  and  ticket  sales  had 
never  been  made. 

3.  That   the   loose   manner   in  which   cash   was   handled 
offered   every   opportunity  for  loss  through   carelessness  or 
dishonesty. 

Because  of  the  destroyed  or  lost  records,  no  exact  information 
has  been  obtainable  as  to  the  number  of  admission  tickets  printed. 
It  was  stated  that  the  Police  Department  files  at  one  time  con- 
tained a  memorandum  showing  the  number  of  tickets  printed,  but 
the  memorandum  was  not  produced.  The  nearest  approach  to  an 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  237 

official  record  on  this  subject  is  a  statement  by  Deputy  Commis- 
sioner Wallis,  in  a  letter  to  Commissioner  Enright,  dated  Septem- 
ber 13,  1918,  to  the  effect  that  550,000  tickets  had  been  donated. 
Had  all  these  tickets  been  sold  and  the  proceeds  deposited  to  the 
credit  of  the  fund,  the  sum  of  about  $500,000  would  have  been 
idealized,  instead  of  the  $374,000  reported  on  December  31,  1920. 

Xo  reliable  information  has  been  obtained  moreover  as  to  the 
number  of  tickets  sold.  It  was  learned  that  bunches  of  tickets 
were  distributed  to  the  precincts  and  issued  for  sale,  and  the 
statement  was  made  that  a  memorandum  was  kept  at  Police  Head- 
quarters on  either  a  yellow  pad  or  in  a  book,  showing  the  tickets 
thus  distributed.  Neither  the  yellow  pad  nor  the  book  was  pro- 
duced for  the  Committee  in  response  to  its  subpoena,  nor  has  the 
Committee  been  given  any  information  as  to  the  present  where- 
abouts of  such  alleged  records. 

So  far  as  the  Committee  has  been  able  to  learn,  no  acceptable 
evidence  from  the  accounting  standpoint  exists  as  to  the  number 
of  tickets  issued  for  sale  or  sold.  In  a  statement  which  appears  to 
have  been  made  by  Deputy  Commissioner  Wallis  at  a  meeting  in 
the  Criterion  Restaurant,  on  August  22,  1918,  he  is  quoted  as 
saying  that  500,000  tickets  had  already  been  sold.  If  this  state- 
ment was  accurate,  there  is  at  least  $125,000  unaccounted  for  by 
the  persons  in  charge  of  ticket  sales,  as  in  the  last  official  report 
of  these  games  the  proceeds  from  the  sale  of  tickets  are  said  to  be 
$374,012.04.  The  use  of  yellow  pad  memoranda  for  the  control 
of  sales  aggregating  hundreds  of  thousands  of  dollars  is  inex- 
cusable and  invites  fraud.  The  subsequent  loss  or  destruction  of 
such  original  records  is  even  more  reprehensible.  As  a  result,  the 
Committee  has  been  unable  to  make  a  real  audit  of  ticket  sales. 

The  method  of  handling  the  money  received  from  the  sale  of 
tickets  appears  to  have  been  equally  loose  and  unbusinesslike.  For 
about  two  weeks  these  receipts  were  allowed  to  accumulate  at  Head- 
quarters in  the  form  of  cash,  and  checks,  being  kept  in  an  office 
safe  for  security.  The  first  bank  deposit  made  was  on  August  21, 
1918,  and  amounted  to  $105,367.40.  An  analysis  of  such  records 
as  the  Committee  has  been  able  to  secure  shows  that  according  to 
the  daily  Telegraph  Bureau  reports,  the  precincts  had  collected 
approximately  $105,000  before  this  deposit  was  made  and  that 
the  actual  receipts  at  Headquarters  from  the  precincts  prior  to 
August  21st,  aggregated  more  than  $105,000.  If  contributions 
were  received  at  Headquarters  from  other  sources  than  the  pre- 


238       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

cincts,.  prior  to  the  date  of  the  first  deposit,  there  is  no  record  to 
indicate  what  became  of  such  contributions. 

Prior  to  this  initial  deposit,  however,  one  of  the  members  of  the 
Police  Fund  Committee  deposited  $52,000  in  cash  in  his  personal 
bank  account  in  Brooklyn,  acting,  it  was  stated,  on  authorization 
of  Deputy  Commissioner  Wallis.  The  bank  records  indicate  that 
this  money  was  subsequently  transferred  to  the  Police  Fund 
account,  but  the  transaction  was  carried  on  in  a  most  unbusiness- 
like way. 

The  general  handling  of  the  funds  was  equally  casual.  Wit- 
nesses testified  that  receipts  were  given  to  precincts  for  the  funds 
turned  in  by  them  and  that  a  cash  book  was  kept  showing  such 
transactions  in  detail.  The  Police  Department,  however,  has  not 
produced  such  cash  book  in  response  to  our  subpoena,  and  from 
the  testimony,  it  appears  that  this  original  record  has  been  lost 
or  destroyed.  One  witness  has  testified  that  the  now  missing  cash 
book  was  in  the  possession  of  the  Police  Department  as  late  as 
February  or  March,  1921,  but  no  information  can  be  obtained  as 
to  its  present  whereabouts. 

The  Committee  has  secured  what  is  said  to  be  a  sort  of  copy  of 
this  cash  book,  made  up  by  a  private  accountant  employed  by 
the  Treasurer  of  the  1918  Fund.  By  the  accountant's  own  admis- 
sion, it  is  not  an  exact  copy  but  he  states  it  sets  forth  accurately  the 
amount  of  receipts  and  expenditures  as  appeared  in  the  original 
records  submitted  to  him. 

The  Committee  finds  no  good  reason  for  the  preparation  of  this 
copied  record.  It  is  a  valueless  document  from  the  point  of  view 
of  audit.  The  receipts  entered  therein  balance  with  disbursements 
and  cash  on  hand,  only  after  a  reconciling  entry  is  made.  Even 
then,  there  is  not  complete  agreement  with  the  figures  as  printed 
in  the  official  report  dated  December  31;  1920.  The  book  con- 
tains a  good  many  erasures  and  alterations.  Every  item  entered 
as  a  receipt  is  entered  as  the  year  1919,  while  as  a  matter  of  fact 
practically  every  item  was  received  in  1918.  A  comparison  of 
such  precinct  records  as  the  Committee  has  been  able  to  secure 
shows  discrepancies  between  the  amounts  entered  in  the  cash  book 
as  received,  and  the  amounts  entered  on  the  official  receipts  issued 
when  the  money  was  delivered  at  Headquarters.  The  Committee 
has  also  found  an  entry  in  the  cash  book  showing  the  receipt  of  a 
contribution  of  $500  from  the  American  Sugar  Refining  Com- 
pany, whereas  the  Committee  has  obtained  from  the  American 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  239 

Sugar  Refining  Company  a  cancelled  check  passed  through  the 
Clearing  House  and  paid,  dated  August  28,  1918,  payable  to  the 
order  of  Frederick  A.  Wallis,  Deputy  Police  Commissioner,  in  the 
sum  of  $1,000 ;  thus  demonstrating  that  in  this  instance  at  least 
the  copied  cash  book  does  not  state  exactly  the  actual  receipts  by 
the  Committee  in  charge  of  the  1918  games. 

Page  after  page  of  items  of  cash  receipts  in  the  copied  record 
just  referred  to  are  undated.  The  loss  or  destruction  of  the  orig- 
inal cash  book,  the  errors,  alterations  and  insufficiency  of  the 
copied  cash  book  makes  an  exact  audit  of  receipts  absolutely 
impossible. 

This  system,  or  lack  of  system  of  financial  control,  invites  loss 
from  carelessness  or  dishonesty.  From  the  evidence  given  before 
the  Committee,  it  appears  that  no  adequate  safeguards  were  estab- 
lished. The  Committee,  while  it  has  not  developed  evidence  prov- 
ing the  dishonesty  of  any  person  or  persons,  is  satisfied  that  there 
was  every  opportunity  for  dishonesty  and  that  the  strange  absence 
of  original  records  of  tickets  sold  and  cash  received  casts  grave 
suspicion  on  the  Department. 

It  is  also  strange,  and  perhaps  significant,  that  the  Commis- 
sioner of  Accounts,  in  spite  of  his  varied  activities,  never  made  a 
real  audit  of  the  transactions  arising  out  of  the  1918  Police  Games- 

Such  matters  vitally  concern  the  public.  The  present  adminis- 
tration has  encouraged  the  use  of  the  uniformed  police  force 
in  selling  tickets  for  benefits.  '  The  police  have  raised  about 
$1,661,000  from  the  public  since  1918.  The  Arch  of  Freedom 
Fund  drew  in  over  $200,000.  The  reported  receipts  from  the 
sale  of  tickets  for  the  1918  games  were  $374,000.  The  1919  games 
brought  in  $318,000.  In  1920,  the  receipts  were  $419,000,  and 
the  1921  games  yielded  about  $350,000. 

The  use  of  the  police  force  to  raise  money  is  highly  improper. 
The  impropriety  is  enhanced  when  no  adequate  control  is  estab- 
lished over  the  cash  obtained  from  the  public  and  where  the  pur- 
pose for  which  the  money  is  raised  from  the  public  is  subject  to 
change  after  the  receipt  of  the  public's  contributions.  If  the  local 
authorities  cannot  be  trusted  to  adopt  the  necessary  precautionary 
measures,  public  interest  requires  the  enactment  of  legislation 
which  will  accomplish  the  desired  end. 

The  Committee  recommends  the  enactment  of  legislation  pro- 
hibiting the  use  of  the  uniformed  forces  of  the  police,  fire  and 
street  cleaning  departments  in  soliciting  funds  for  any  purpose 
whatsoever. 


240       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 


SPECULATION  AND  MONEY  MAKING  BY  POLICE 
OFFICIALS. 

The  Committee  inquired  into  the  profits  which  accrued  tv> 
present  and  former  members  of  the  Police  Department,  largely, 
if  not  wholly,  because  of  their  official  positions.  It  found  thht 
such  persons  had  benefited  materially  from  investments,  from 
business  connections,  from  gifts  and  from  real  estate  transactions. 
For  example : 

Richard  E.  Enright. 

On  February  15,  1918,  Commissioner  Enright  appointed  Dr. 
John  A.  Harriss  a  Special  Deputy  Commissioner.  On  March  4, 
1918,  seventeen  days  later,  Dr.  Harriss  purchased  a  Packard 
Twin-Six  automobile  from  the  Packard  Motor  Car  Company,  at 
a  cost  of  $4,622.40.  The  initials  "E.  E.  E."  were  ordered  placed 
on  that  car,  and  the  car  was  put  at  the  disposal  of  Eichard  E. 
Enright.  Commissioner  Enright  testified  that  the  car  had  not 
been  given  to  him  "yet,"  saying,  "He  would  have  given  it  to 
me  if  I  wanted  it.  I  told  him  I  would  discuss  that  with  him  after 
I  got  through  with  the  office."  In  the  meantime,  the  Commis- 
sioner uses  it  as  his  own  and  the  expense  of  maintaining  it  (in- 
cluding the  purchase  of  an  eighty  dollar  pair  of  field  glasses)  is 
borne  by  the  City  of  New  York,  out  of  Police  Department  funds. 

On  April  15,  1918,  Commissioner  Enright  appointed  Allan  A. 
Kyan  a  Special  Deputy  Commissioner  and  on  April  16,  1918,  a 
Stutz  automobile  was  delivered  to  Commissioner  Enright.  This 
car  was  paid  for  on  April  16th  by  a  cheque  of  Allan  A.  Eyan's 
for  $2,641.50.  Commissioner  Enright  testified  that  this  was  a 
gift  to  Mrs.  Enright  from  Mr.  Eyan,  Mr.  James  H.  Ward  and, 
he  thought,  others.  Commissioner  Enright  was  not  married,  how- 
ever, until  November,  1918. 

In  April,  1919,  Commissioner  Enright  received  a  cheque  for 
$12,083.29  from  Allan  A.  Eyan  &  Co.,  representing  "  profits  r 
on  a  transaction  in  Morton  Petroleum  stock.  Commissioner 
Enright  put  up  no  money  himself,  did  not  know  when  the  stock 
was  purchased  nor  when  it  was  sold.  About  four  months  after 
a  conversation  with  Eyan  about  possible  stock  speculation,  he 
received  a  report  of  the  Morton  Petroleum  transaction  and  the 
cheque. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  241 

Edward  P.  Hughes. 

Edward  P.  Hughes,  a  friend  of  Commissioner  Enright's,  re- 
tired as  police  inspector  February  15,  1918,  for  "  physical  dis- 
ability "  and  organized  a  piivate  detective  agency.  He  received 
contracts  to  police  the  piers  of  a  number  of  steamship  lines  and 
the  testimony  taken  before  the  Committee  showed  that  his  close 
relations  with  the  Police  Department  were  of  material  value  to 
him  in  getting  and  keeping  business. 

An  examination  of  his  various  bank  accounts,  business,  per- 
sonal and  joint  with  his  wife  showed  deposits  between  January  1, 
1918,  and  September  15,  1921,  totaling  over  one  million  dollars, 
as  follows: 

1918         1919        1920         1921 

Detective  service ...     .      $97,67882     $255,09005     $267,94577     $130,63100     Up  to  Septem- 
ber 15. 

E.P.Hughes 133,23822       112,94230         32,40443     Up  to  Septem- 
ber 15. 
Joint  account 23,089  92  8,237  08  4,770  50  3,125  00     Up  to  Septem- 

In  addition,  Hughes  had  a  speculative  account  with  Allan  A. 
Ryan  &  Co.  This  was  opened  in  1916,  but  showed  dealings  of 
only  $2,335.14  up  to  February  28,  1918.  In  1918,  however,  the 
total  was  $7,900,  and  in  1919  it  was  $105,000. 

Domini ck  Henry. 

The  financial  transactions  of  Police  Inspector  Dominick  Henry 
were  not  so  spectacular.  His  salary  was  $4,900  per  annum  and 
his  bank  accounts  showed  deposits  as  follows: 

1918    $10,184  04 

1919    14,659  73 

1920    9,095  00 

1921  to  September  7 242  30 

Henry's  account  with  Billings,  Olcott  &  Winsmore  also  showed 
the  outright  purchase  of  stocks  as  follows: 

October,  1919    $10,552  95 

November,  1919   35,825  00 

May,   1920   21,615  69 

The  most  significant  fact  established  by  the  Committee  with 
respect  to  Inspector  Henry's  personal  forturieb  was  that  the 
Xavigazione  Generale  Italiana,  a  steamship  line  leasing  two 
North  River  piers,  donated  $1,000  to  Henry,  the  Inspector  in 
whose  district  the  piers  were  located.  The  steamship  company 


242       INVESTIGATION  OF  AFFAIRS  OF  NEW  YOKK  CITY 

had  not  been  getting  adequate  protection,  and  in  the  course  of  a 
conference  at  police  headquarters  to  discuss  this  matter,  Henry 
suggested  that  an  ex-police  inspector  named  Cross  be  employed  in 
place  of  the  Vachris  detective  agency,  to  furnish  watchmen  on 
the  piers.  The  change  was  made  but  the  new  arrangement  cost 
the  steamship  company  twice  as  much  as  the  old,  exclusive  of  the 
payments  to  Henry.  These  payments  were  explained  by  Francis 
Gilbert,  the  attorney  who  made  them,  as  having  been  made  because 
of  sympathy  for  Henry  who  was  under  indictment  at  the  time 
for  neglect  of  duty  and  who  was  very  hard  up  because  of  the 
expenses  incident  to  his  trial.  The  first  "  contribution  "  by  the 
Italian  line  to  relieve  Henry's  poverty  amounted  to  $500  and 
was  entered  on  their  ledger  under  date  of  May  21,  1920,  as 
"  Gratuity  as  per  advice  of  Gilbert  $500."  On  the  same  day, 
namely,  May  21,  1920,  Henry  paid  $18,615.69  to  the  firm  of 
Billings,  Olcott  &  Winsmore,  which  amount  with  the  sum  of 
$3,000  paid  the  preceding  day  was  the  purchase  price  of  stocks 
bought  by  him  and  costing  $21,615.69. 

John  F.  Dwyer. 

During  the  Committee's  investigation  of  the  financial  opera- 
tions of  high  officials  in  the  Police  Department,  it  learned  of  the 
purchase  by  Inspector  John  F.  Dwyer  of  an  apartment  house, 
through  the  office  of  Warren  Leslie,  an  attorney.  The  Committee 
accordingly  made  a  careful  inquiry  into  the  facts  and  into  the 
relations  of  Leslie  and  Dwyer,  and  found: 

1.  That,   in   1920,   Leslie   arranged   for  the   purchase   by 
Dwyer,  at  the  price  of  $152,000,  of  the  apartment  house  at 
403  West  115th  street,  through  Leslie's  father  as  a  dummy, 
and  for  the  subsequent  transfer  thereof  to  the  Park  Court 
Realty  Company,  a  corporation  formed  for  the  purpose  of 
holding  the  property,  Dwyer's  interests  in  these  transactions 
being  carefully  concealed. 

2.  That  in  1919,  Leslie  arranged  for  the  sale  by  Inspector 
Dwyer  of   an   interest  which  the  latter  owned  in   a  hotel 
known  as  the  Hotel  Van  Cortlandt,  or  more  recently  the 
Hotel    DeFrance,    located    at    142    West   49th    street,    and 
notorious  for  years  for  its  immoral  character. 

3.  That  Leslie  had  utilized  the  services  of  at  least  one 
police  officer  on  Dwyer's  staff,  to  secure  evidence  in  a  case 
of  private  litigation  in  which  Leslie  had  been  retained  as 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  243 

counsel,  and  that  much  of  the  evidence  thus  secured  was 
obtained  by  tapping  the  telephone  wires  of  the  person  con- 
cerning whom  evidence  was  desired,  in  violation  of  section 
1423  of  the  penal  law. 

The  Apartment  House  Transaction. 

Committee  Exhibit  ^"o.  243  of  October  4,  1921,  is  a  contract 
for  property  executed  in  March,  1920,  and  covering  the  sale  by 
the  Simley  Realty  Corporation  to  Warren  Leslie  of  the  above 
mentioned  property  on  West  115th  street,  for  a  consideration  of 
$152,000. 

Dwyer  was  the  actual  purchaser  of  this  property,  but  when 
conveyance  was  actually  made  the  grantee  named  was  one  William 
Leslie,  father  of  Warren  Leslie.  The  property  was  subsequently 
transferred  by  the  nominal  grantee  to  the  Park  Court  Realty 
Company,  a  corporation  organized  in  Warren  Leslie's  office  and 
whose  directors  were  persons  employed  in  Warren  Leslie's  office. 

Annie  L.  Rogers,  a  tenant  of  this  apartment  house,  identified 
(p.  2240)  Inspector  Dwyer  as  the  man  who  introduced  himself 
to  her  on  a  date  subsequent  to  August  15,  1921,  as  the  owner 
and  superintendent  of  the  apartment  house. 

Frank  Wulf,  a  member  of  the  police  reserves,  testified  (p. 
2542)  that  at  Inspector  Dwyer's  request  he  did  some  work  at 
403  West  115th  street,  that  Dwyer' s  son  Ralph  would,  from  time 
to  time,  call  up  Cortlandt  33  and  ask  for  "  Dad/7  for  instructions 
about  the  work,  and  that  sometimes  Inspector  Dwyer  himself 
would  come  and  give  instructions  about  the  work. 

On  August  31,  1921,  John  F.  Dwyer  made  an  affidavit  in 
connection  with  litigation  between  a  tenant  and  the  Park  Court 
Realty  Company,  to  the  effect  that  he  was  neither  a  director, 
officer,  nor  agent  of  the  corporation,  and  was  in  no  wise  connected 
with  the  management  or  business  affairs  of  said  corporation.  On 
September  16,  1921,  he  made  a  second  affidavit  in  the  same  case 
to  the  effect  that  he  was  neither  "  an  officer,  director,  nor  stock- 
holder of  the  defendant  herein"  (Park  Court  Realty  Corpora- 
tion), that  he  had  "  no  financial  interest  in  said  company,"  and 
denying  that  he  was  "the  owner  of  the  premises  referred  to77 
herein,  and  denying  that  he  had  "  any  interest  therein.77  The 
affidavit  continues,  "Deponent  further  says  that  since  July,  1920, 
when  the  Park  Court  Realty  Company,  Inc.,  acquired  the  prop- 
erty, I  have  visited  the  premises  on  several  occasions  solely  for 


244       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

the  purpose  of  seeing  my  two  sons,  James  and  Ralph,  both  of 
whom  lived  at  the  time  in  the  premises." 

Thirteen  days  later  (September  29)  Dwyer  testified  before  the 
Committee  under  oath  that  he  was  the  purchaser  of  this  property, 
that,  on  the  advice  of  Leslie  he  had  the  property  conveyed  to  Wil- 
liam Leslie,  but  that  (p.  2276)  he  was  the  "  real  party  in  inter- 
est," and  that  it  was  by  his  (Dwyer's)  direction  that  the  prop- 
erty was  conveyed  by  William  Leslie  to  the  Park  Court  Realty 
Company.  He  stated  to  the  Committee  that  (p.  2279)  "between 
the  seventh  of  June  and  probably  the  first  of  July"  he  assigned 
all  of  his  shares  in  that  company  to  his  son  and  that  his  son 
(p.  2281)  paid  nothing  for  the  stock  so  assigned.  When  asked  as 
to  his  son's  whereabouts,  Dwyer  replied  (p.  2279)  "He  left  here 
on  the  steamer  l Steelmaker '  for  Boimbay,  India,  calling)  at 
several  ports  on  the  way.  The  boy  got  sick."  Dwyer  also  stated 
at  first  that  he  had  a  general  power  of  attorney  from  his  son,  but 
later  denied  it. 

With  respect  to  Dwyer's  statement  that  his  son  was  sick, 
Patrick  F.  Donnelly,  marine  superintendent,  Isthmian  Steamship 
Tine,  owners  of  the  S.  S.  "  Steelmaker,"  on  which  James  L. 
Dwyer  sailed,  testified  (p.  2497)  that  Dwyer  introduced  his  son, 
James,  by  letter,  saying  "  he  is  desirous  of  going  to  sea  and  I  will 
appreciate  anything  you  may  be  able  to  do  for  him,"  and  that 
as  a  result  the  boy  was  shipped  as  an  ordinary  seaman  with  wages 
of  $52.50  a  month.  In  reply  to' the  question:  "Was  he  in  good 
health  ? ",  Donnelly  said,  "  He  appeared  to  be  all  right." 

With  respect  to  Dwyer' s  statement  that  he  had  assigned  all  his 
stock  in  the  Park  Court  Realty  Company  to  his  son  before  the 
latter  sailed,  Gertrude  M.  Steinway,  an  employee  in  Leslie's  office 
and  secretary  and  treasurer  of  the  Park  Court  Realty  Company, 
produced  the  stock  book  of  the  company  which  showed  the  follow- 
ing distribution  of  stock  as  of  October  4,  1921 : 

Date  Number 

Name  of  Issue  of  Shares 

John  F.  Driscoll April  6,     1921 5 

Cornelius  F.  Dwyer April  6,     1921 29 

John  F.  Dwyer! April  6,     1921 106 

Gertrude  M."  Steinway April  11,  1921 1 

James  L.  Dwyer ..      April  6,     1921 30 


EEPOET  OF  JOINT  LEGISLATIVE  COMMITTEE  245 

Her  testimony  on  this  point  follows  (p.  2499)  : 

"  Q.  Has  any  transfer  of  106  shares  issued  to  John  F. 
Dwyer  to  anybody  else  by  him  —  have  you  any  record  of  it  ? 
A.  ^N"O,  I  have  not. 

Q.  Has  your  attention  been  called  to  it  in  any  way?  A. 
It  has  not." 

The  evidence  indicates  that  Inspector  Dwyer,  in  spite  of  his 
affidavits  and  testimony  remains  the  real  party  at  interest  with 
respect  to  the  Park  Court  Kealty  Company  property. 

The  Hotel  Van  Cortlandt  —  Hotel  De  France. 

Dwyer  admitted  (p.  2528)  that  he  had  been  a  stockholder  in 
the  company  which  owned  the  Hotel  De  France,  formerly  the 
Hotel  Van  Cortlandt,  on  West  49th  Street. 

The  Committee  subpoenaed  transcripts  of  the  bank  accounts  of 
Leslie  and  Dwyer  with  the  Empire  Trust  Company,  and  also 
Dwyer's  deposit  slips.  These  records  showed  that  Dwyer  depos- 
ited on  January  22,  1920,  a  check  on  the  Empire  Trust  Com- 
pany for  $6,651.45,  and  that  on  the  same  day  Leslie's  account 
was  charged  with  this  item.  Leslie  voluntarily  offered  to  exhibit 
his  personal  ledger  and  to  explain  to  the  Committee  the  circum- 
stances surrounding  all  his  payments  to  Dwyer,  including  this 
amount.  He  was  given  this  opportunity  informally  and  exhib- 
ited a  ledger  containing  an  account  with  Dwyer  in  connection  with 
the  Hotel  De  France  property,  thus  establishing  the  fact  that  he 
had  handled  funds  from  the  sale  of  Dwyer's  interest  in  that  hotel. 

The  unsavory  character  of  that  hotel  in  the  past  few  years  has 
been  notorious,  and  as  Dwyer  for  some  time  was  the  Police  Inspec- 
tor in  command  of  the  Fourth  Inspection  District  in  which  this 
hotel  was  located,  he  must  have  known  officially  of  its  disorderly 
character,  but  he  testified  that  the  reputation  of  the  hotel  was 
good,  that  he  never  stationed  policemen  at  the  hotel  to  suppress  a 
nuisance,  and  that  he  knew  of  no  men  being  stationed  there  for 
that  purpose. 

The  records  of  the  Police  Department  with  respect  to  these 
premises,  however,  contain  a  copy  of  a  letter  written  by  the  Police 
Commissioner,  September  26.  1918,  to  the  receiver  of  the  Hotel 
Van  Cortlandt,  reading  in  part  as  follows: 

"  For  s^me  time  past  the  Hotel  Van  Cortlandt  was  run 
in  a  manner  that  compered  strict  police  surveillance.  Its 


*. 

246       INVESTIGATION  or  AFFAIRS  OF  NEW  YORK  CITY 

reputation  as  a  rendezvous  for  undesirable  characters  is  so 
confirmed  that  the  police  of  the  district  have  felt  it  necessary 
to  continue  to  give  it,  at  least,  casual  supervision." 

Police  Commissioner  Enright  described  this  hotel  in  his  testi- 
mony before  the  Committee,  as  follows:  (p.  3672) 

"  It  is  one  of  many  other  such  houses  in  this  town  we  have 
to  watch  all  the  time.  *  *  *  They  have  entertained 
single  men  and  their  wives,  and  single  ladies  and  their  hus- 
bands frequently.  You  would  be  surprised  too,  Senator,  if 
you  knew  who  some  of  them  are." 

The  police  records  also  show  three  arrests  at  the  Hotel  Van 
Cortlandt  —  Hotel  De  France  for  prostitution  in  1918,  and  one 
in  1920,  and-  that  patrolmen  were  stationed  at  the  hotel  from 
April  24,  1918,  to  May  10,  1918 ;  from  June  25,  1918.  to  July  2, 
1918 ;  from  November  23,  1918,  to  November  24,  1918,  and  from 
October  31,  1920,  to  November  2,  1920. 

That  a  police  inspector  should  be  financially  interested  in  such 
a  resort  needs  no  further  comment. 

The  Wire-tapping  Case. 

Warren  Leslie,  Dwyer's  attorney  in  these  other  two  transactions, 
was  engaged  as  counsel  by  Mrs.  Allers  in  her  litigation  against 
her  husband.  He  employed  John  W.  Sutter,  a  policeman  on 
Dwyer's  staff,  and  Sutter's  brother-in-law,  James  Shaw,  to  secure 
evidence  against  Dr.  Allers.  Sutter  came  almost  daily  to  Leslie's 
office  with  detective  reports  and  was  known  by  at  least  one  person 
in  the  office  as  "  Shaw."  The  real  Shaw  rented  a  room  in  a  house 
across  the  street  from  Dr.  Allers'  house  and  after  the  room  was 
thus  rented  a  wire  was  strung  to  it  from  the  telephone  post  on  the 
street.  Shaw  told  his  landlord  that  he  was  a  detective.  The  land- 
lord testified  that  the  wire  was  fastened  to  a  hook  outside  the 
window  and  that  there  was  a  little  round  attachment  to  the  end 
of  the  wire.  The  landlord's  wife  identified  SHitter  as  a  frequent 
visitor  to  Shaw's  room,  but  stated  that  he  was  known  to  her  not 
as  Sutter,  but  as  Sullivan. 

Persons  employed  in  Leslie's  office  admitted  that  they  knew  of 
the  wire  tapping  and  that  they  had  heard  Leslie  discuss  the  mat- 
ter. A  lawyer  associated  with  Leslie  in  the  case  refused  to  use 
the  evidence  secured  in  this  manner  when  he  learned  how  it  had 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  247 

been  secured  and  by  whom.  He  testified  that  Shaw  admitted 
under  pressure  that  Dr.  Allers'  wires  had  been  tapped  and  that 
reports  purporting  to  be  reports  of  "  shadowing "  were  in  fact 
written  up  from  listening  in  to  telephone  conversations. 

Mrs.  Anna  F.  Wamsley  of  Olmstedville,  N.  Y.,  identified  Sutter 
as  a  man  who  came  to  her  home  in  November,  1919,  to  make 
inquiry  about  Dr.  Allers. 

Leslie  denied  knowledge  of  the  wire-tapping  and  explained 
Butter's  frequent  visits  to  his  office  by  saying,  "  What  Sutter  came 
to  my  office  with  were  charges  preferred  against  members  of  the 
police  reserve,  which  I  looked  over  and  passed  upon  before  they 
were  filed.  That  was  his  business  in  my  office."  The  records  of 
police  reserve  court-martials,  however,  show  a  total  of  only  51 
cases  from  July  20,  1918,  to  October  1,  1921,  only  11  of  which 
bear  Leslie's  name.  The  latest  of  these  11  is  dated  April  4,  1919, 
and  was  concluded  May  2,  1919,  several  months  before  the  detec- 
tive work  described  above.  Sutter's  "  very  frequent  visits  "  to 
Leslie's  office  after  May  2,  1919,  must  therefore  be  explained  in 
some  more  plausible  way  if  he  is  to  be  cleared  of  the  charge 
against  him. 

It  appears  from  the  evidence  that  Sutter,  Shaw  and  Leslie  per- 
jured themselves  before  the  Committee  and  that  Sutter  and  Shaw 
violated  the  penal  code  by  tapping  the  telephone  wires  of  Dr. 
Allers. 


1 

248       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 


DIVISION    OF    LICENSED    VEHICLES    OF    DEPART- 
MENT OF  LICENSES. 

The  Department  of  Licenses  was  created  by  Chapter  475  of 
the  Laws  of  1914  as  a  consolidation  of  most,  but  not  all,  of  the 
previously  existing  licensing  agencies  of  the  C'ity  government.  It 
has  control  of  the  licensing,  among  other  things,  of  hacks,  cabs 
and  taxicabs  and  of  drivers  or  chauffeurs  of  hacks,  cabs  and 
taricabs.  That  part  of  its  jurisdiction  is  exercised  through  the 
Division  of  Licensed  Vehicles. 

The  City  ordinances  (Chapter  14)  provide,  with  reference  to 
the  vehicles  (§  84)  that  they  shall  not  be  licensed  until  they 
have  been  "  thoroughly  and  carefully  inspected  *  *  and 

found  to  be  in  thoroughly  safe  condition  *  *  *,  clean,  fit,  of 
good  appearance  and  well  painted  and  varnished."  Taximeters 
must  be  examined  for  accuracy.  With  reference  to  taxicab 
chauffeurs  the  ordinances,  while  not  expressly  so  providing,  con- 
tain provision  doubtless  intended  to  prohibit  the  licensing  of 
any  but  persons  of  good  character.  They  require  the  produc- 
tion of  affidavits  of  good  character  from  two  reputable  citizens, 
a  "  testimonial  "  from  the  last  employer  and  the  filling  out  of 
a  sworn  statement  showing,  among  other  things,  whether  the  ap- 
plicant "  has  ever  been  convicted  of  a  felony  or  a  misdemeanor  " 
and  "  whether  he  has  ever  been  summoned  to  court," 

Prior  to  this  administration,  the  discharge  of  this  branch  of 
the  License  Department's  functions  had  been  largely  committed 
to  the  Chief  of  the  Division  of  Licensed  Vehicles.  Cabs  were 
kept  clean  and  safe;  taximeters  were  reasonably  accurate;  and 
taxicab  chauffeurs  were  kept  under  strict  supervision.  The  pub- 
lic was  well  served,  but  the  drivers  complained  of  the  rigid 
control  to  which  they  were  subjected. 

With  the  advent  of  the  present  administration,  this  control 
was  considerably  relaxed.  The  Chief  of  the  Division  of 
Licensed  Vehicles  was  shorn  of  power.  An  official  sub- 
ordinate was  made  his  actual  superior  in  charge  of  the 
issue  of  licenses  and  one  of  the  Deputy  Commissioners, 
James  F.  Geraghty,  a  district  leader  in  the  Bronx,  was 
placed  in  direct  charge  of  the  Division.  From  time  to  time  the 
complicity  of  taxicab  chauffeurs  in  crimes  of  violence,  often  com- 
mitted in  broad  daylight,  roused  public  concern.  While  this 
branch  of  the  inquiry  was  under  way,  Geraghty ?s  resignation  was 
invited  and  submitted. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  249 

The  Committee's  investigation  disclosed  that  the  administra- 
tion of  the  Division  of  Licensed  Vehicles  of  the  License  Depart- 
ment under  Deputy  Commissioner  Geraghty  not  only  made  it 
a  hot  bed  of  petty  graft,  but  that  the  safety  of  the  public  has 
been  seriously  menaced  by  the  large  number  of  licenses,  as  taxi- 
cab  drivers,  issued  to  ex-convicts.  All  of  such  cases  were  not 
located  by  the  Committee.  That  was  prevented  by  the  obstruc- 
tive tactics  of  certain  members  of  the  division's  force  and  by 
lack  of  time  available  for  this  phase  of  the  investigation.  The 
Committee  did,  however,  find  that  taxi-drivers'  licenses  had  been 
issued  within  a  year  to  153  convicted  felons  and  226  persons 
convicted  of  serious  misdemeanors.  These  379  licensees  were 
either  actively  plying  their  trade  with  the  approval  of  the  de- 
partment or  were  the  holders  of  licenses  enabling  them  so  to  do, 
which  the  department  made  no  serious  effort  to  cancel.  In  many 
of  these  instances  the  criminal  records  of  the  applicants  were 
known  before  the  licenses  were  issued  and  in  all  of  them,  it 
should  have  been  known  before  such  issue.  Of  the  153  con- 
victed felons  who  were  licensed  taxi-drivers,  sixty-seven  had  been 
convicted  of  grand  larceny,  thirty-five  of  burglary,  five  of  rob- 
bery, fifteen  of  felonious  assault,  five  of  assault  in  the  second 
degree,  three  of  rape,  three  of  abduction  and  twenty  of  miscel- 
laneous felonies.  In  many  instances  licensees  had  been  convicted 
of  the  same  or  of  an  assortment  of  felonies  at  various  times  prior 
to  obtaining  the  license.  They  have  been  counted  only  once  in 
the  foregoing  statement. 

Of  the  convicted  misdemeanants  holding  licenses,  slightly  more 
than  half,  117,  had  been  convicted  of  petty  larceny.  This  is, 
however,  more  serious  than  it  seems,  because  many  of  these  were 
cases,  in  which  petit  larceny  was  the  plea  of  guilty  upon  the 
charge  of  grand  larceny,  burglary  or  other  graver  crime.  In- 
toxication, impairing  the  morals  of  a  minor,  unlawful  entry, 
indecent  exposure  and  having  concealed  weapons  were  among  the 
other  convictions  against  persons  to  whom  licenses  were  granted. 
The  explanation  of  such  a  condition  may  be  in  mere  ineffi- 
ciency. Certainly  the  haphazard  confusion  in  which  the  records 
of  the  division  were  found  was  well  calculated  to  increase  its 
difficulty  in  locating  its  information  about  a  given  applicant. 
On  the  other  hand,  the  evidence  in  relatio-n  to  other  activities 
of  the  division,  difficult  as  it  was  to  get  from  those  who  had  been 
victimized  and  who  naturally  feared  reprisal  for  any  disclosures 
they  might  have  made,  would  tend  to  indicate  that  convicts  ob- 


250       INVESTIGATION  OF  AFFAIES  OF  NEW  YORK  CITY 

tained  taxi-drivers7  licenses  either  for  a  money  payment  or 
through  the  use  of  political  influence. 

The  inspection  of  a  taxi-cab  submitted  for  license  has  been  a 
prolific  opportunity  for  petty  graft.  One  inspector  would  ex- 
amine the  brakes;  another  the  general  appearance  of  the  cab. 
The  second  began  after  the  first  finished  and  gave  the  applicant 
an  O.  K.  slip.  These  "  O.  Ks  "  caried  a  well  understood  price. 
This  condition  had  been  brought  to  the  attention  of  Geraghty 
by  one  of  the  hackmen  and  Geraghty  promised  to  end  it,  but 
nothing  was  done. 

Geraghty's  tolerance  is  not  difficult  to  understand  in  view  of 
his  own  standards  of  conduct  in  public  office.  For  instance, 
when  his  political  club  held  an  "  outing  "  twenty-seven  taxicabs 
were  furnished  him  gratis  by  an  association  of  taxi-drivers,  which 
itself  paid  the  men  who  owned  the  cabs.  When  his  club  gave 
an  affair  this  same  organization  was  requested  to  and  did  buy 
$100  worth  of  tickets.  When  the  bill  for  the  transfer  of  juris- 
diction over  the  licensing  of  cabs  and  drivers  was  pending,  em- 
ployees of  the  division  professed  to  fear  for  their  positions  and 
raised  a  fund  for  expenses  in  working  up  opposition  by  the  sale 
of  raffle  tickets  among  the  persons  licensed  by  the  department.  In 
a  word  the  division  has  been  completely  demoralized. 

The  Routine  of  a  Taxi-Driver's  Application. 

In  relation  to  the  issue  of  taxi-drivers'  licenses,  the  claimed 
routine  should  be  stated. 

The  applicant  for  a  license  to  drive  a  hack  or  taxicab  goes  to 
517  West  57th  Street,  the  office  of  the  Division  of  Licensed  Ve- 
hicles and  sumbits  his  application  to  John  S.  Egan,  inspector  of 
licensed  vehicles.  If  he  desires  a  license  to  drive  a  taxicab  he 
is  asked  to  give  his  state  chauffeur's  license  number  and  must 
have  one  before  a  taxi-driver's  license  is  issued  to  him.  He  is 
then  given  an  application  to  fill  out.  This  includes  the  usual 
questions  as  to  name,  residence,  age,  place  of  birth,  etc.,  and  in 
addition  the  following  question :  "  10.  Have  you  ever  been  ar- 
rested or  summoned  to  court?  Give  particulars  and  disposition 
of  every  such  case."  The  applicant  is  required  to  give  the  names 
and  addresses  of  his  employers  and  his  occupation  for  the  past 
five  years.  He  must  give  a  personal  description  of  himself,  sup- 
ply two  copies  of  his  photograph,  and  submit  an  impression  of 
his  finger  prints.  He  must  have  two  witnesses  who  will  vouch 
for  his  character  and  a  statement  from  a  reputable  physician.. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  251 

that  he  is  physically  fit  to  drive  a  taxicab  and  in  addition  he 
must  have  a  certificate  of  his  employer  stating  the  reason  for 
the  termination  of  the  employment.  On  the  reverse  side  of  the 
finger-print  record  is  a  space  headed  "  Remarks."  This  is  for 
the  notation  of  the  Police  Department.  The  finger-print  rec- 
ord is  signed  by  the  license  inspector  who  takes  the  applicant's 
finger  prints. 

The  original  application  and  the  finger-print  record  is  sent 
from  the  License  Bureau  at  57th  Street  to  the  Investigation  Squad 
of  the  Police  Department  at  30th  Street  between  Sixth  and  Sev- 
enth Avenues. 

The  application  and  finger-print  record  are  generally  received 
the  same  day  they  are  completed  and  are  delivered  to  the  Investi- 
gation Squad  by  a  messenger  from  the  License  Department,  but 
in  favored  cases  where  an  applicant  is  particularly  anxious  to 
have  immediate  action  the  applicant  himself  is  permitted  to  de- 
liver the  papers. 

When  the  finger-print  record  and  the  application  are  received 
by  the  Investigation  Squad  an  entry  is  made  in  a  book  known  as 
a  Register  of  Applicants  and  Record  of  Finger  Prints.  The 
application  is  given  a  serial  number.  The  name  and  address 
of  the  applicant  and  the  state  license  number  are  also  noted.  In 
this  book  is  also  placed  the  date  on  which  the  final  report  is  sent 
by  the  Police  Department  to  the  Department  of  Licenses  with 
a  statement  as  to  the  number  of  felonies,  misdemeanors  and  sum- 
monses on  the  record  of  the  applicant.  There  is  also  a  nota- 
tion as  to  whether  or  not  there  is  a  finger-print  record  in  the 
Police  Department. 

The  following  day  the  finger-print  record  and  the  application 
are  separated.  The  finger-print  record  is  then  sent  to  the  Po- 
lice Department's  Bureau  of  Criminal  Identification  for  compari- 
son and  search.  In  three  or  four  days  it  is  returned  to  the 
Investigation  Squad  with  notations  under  the  caption  "  Re- 
marks." These  remarks  give  the  criminal  record  of  the  appli- 
cant, stating  the  felonies  and  misdemeanors,  together  with  the 
dates  of  the  arrest.  These  notations  are  neither  signed  nor  dated. 
In  cases  where  the  applicant's  finger  prints  are  not  on  record 
in  the  Police  Department,  the  space  is  left  blank,  indicating  that 
the  man  has  no  criminal  record.  Occasionally  the  examiner 
will  write  his  name  in  the  space  under  "  Remarks  "  when  there 
is  no  criminal  record.  After  the  notations  above  referred  to 
have  been  entered  in  the  Register  of  Applicants  and  Recording 


252       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

Finger  Prints,  the  finger-print  record  is  returned  to  the  License 
Department  at  57th  Street.  A  copy  of  the  finger-print  record 
is  retained  hy  the  Investigation  Squad. 

After  being  separated  from  the  finger-print  record  the  appli- 
cation itself  is  sent  to  the  Old  Record  Room  of  the  Police  De- 
partment at  MacDougal  Street  for  search  of  arrests  of  any  kind. 
After  the  records  at  the  Old  Record  Room  have  been  searched 
the  application  is  sent  to  the  Bureau  of  Information  for  a  search 
of  the  records  of  the  last  two  years.  The  applications  are  re- 
turned to  the  Investigation  Squad  from  the  Bureau  of  Informa- 
tion very  irregularly  in  lots.  This  process,  from  the  time  the 
application  leaves  the  Investigation  Squad  until  it  is  returned, 
takes  about  two  weeks.  When  returned  the  applications  are 
checked  off  on  the  Register  of  Applicants  and  Record  of  Finger 
Prints  to  see  that  all  have  been  returned.  ~No  date  is  placed 
on  the  application.  Then  the  application  blank  is  turned  over 
to  an  investigator  of  the  Investigation  Squad.  The  staff  of  the 
Investigation  Squad  consists  of  fifteen  regular  men,  including 
Acting  Captain  Finn.  The  squad  is  known  as  the  "  Crippled 
Squad  "  because  the  staff  is  composed  of  men  who  have  been 
injured  or  incapacitated  in  the  performance  of  duty.  The  in- 
vestigator who  receives  the  application  makes  a  personal  investi- 
gation. He  is  supposed  to  interview  the  applicant  and  verify 
the  statements  on  the  application  and  other  material  details.  He 
is  supposed  also  to  interview  the  vouching  witnesses,  the  physi- 
cian and  the  former  employer  of  the  applicant  and  he  is  supposed 
to  make  general  inquiries  among  the  applicant's  business  asso- 
ciates and  those  in  the  neighborhood  of  his  residence,  as  to  the 
applicant's  character  and  general  fitness  to  drive  a  taxicab.  When 
the  investigation  is  completed  the  investigator  makes  his  report 
to  the  Investigation  Squad. 

The  report  of  the  investigator,  together  with  all  other  data, 
including  that  originally  noted  on  the  finger-print  record,  com- 
prises what  is  known  as  the  Police  Report.  A  typewritten  copy 
of  this  is  sent  to  the  Department  of  Licenses  with  the  applica- 
tion by  messenger.  A  copy  of  the  report  is  retained  by  the  In- 
vestigation Squad. 

Because  of  the  detail  of  the  investigation  and  the  physical 
incapacity  of  the  members  of  the  squad  it  is  quite  usual  for  sev- 
eral months  to  elapse  between  the  time  the  application  is  sent 
to  the  Police  Department  and  the  time  it  is  returned  therefrom 
to  the  License  Department. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  253 

In  the  meantime  the  finger-print  record  having  returned  to  the 
License  Department,  if  it  contains  no  notations  in  the  "  Re- 
marks "  space,  it  is  assumed  that  the  applicant  has  no  criminal 
record,  and  the  License  Department  immediately  issues  a  license. 

When  the  finger-print  record  is  received  from  the  Police  De- 
partment with  a  notation  under  "  Remarks  "  to  the  effect  that 
the  applicant  has  an  important  criminal  record,  the  license  is 
not  issued.  If  the  man  has  been  convicted  of  a  felony  the  appli- 
cation is  marked  "  denied  "  and  that  is  said  to  be  the  end  of 
the  case.  If  the  police  record  shows  an  arrest  the  man  is  required 
to  obtain  from  the  court  before  whom  he  was  arraigned  the  proper 
official  documents,  showing  the  disposition  of  his  case. 

If  he  was  convicted  of  a  misdemeanor  his  papers  are  sent  to 
Deputy  Commissioner  Geraghty  at  the  main  office.  Geraghty 
passes  on  the  merits  of  the  case  and  marks  the  application  0.  K. 
or  denied.  If  Geraghty  O.  K.'s  the  application  the  license  is 
issued. 

In  many  cases,  although  the  finger-print  record  is  returned 
with  nothing  to  indicate  a  criminal  record,  the  subsequent  police 
report  some  time  later  discloses  the  fact  that  one  applicant  has 
such  a  record.  In  such  cases,  the  license  having  been  already 
issued  to  him,  his  file  is  removed  from  the  "  active  "  file  and 
placed  in  the  "  suspended  "  file.  A  letter  is  then  sent  out  to 
the  licensee  to  the  following  effect :  "  Please  call  at  this  office  as 
soon  as  possible  with  your  badge  and  book  as  it  is  necessary 
to  make  some  correction  in  same  as  there  are  two  men  working 
on  this  same  number."  If  the  licensee  fails  to  see  through  this 
strategy  and  reports,  his  badge  and  book  are  taken  from  him  and 
the  entire  container  is  sent  down  to  Commissioner  Geraghty  for 
a  hearing  on  the  case.  If  Geraghty  so1  decides  the  license  is  re- 
voked. If  not,  the  badge  and  book  will  be  returned  to  the  man 
and  he  will  be  permitted  once  more  to  operate. 

If  the  licensee  does  not  call  in  response  to  the  stupid  "  decoy  " 
letter,  neither  the  License  Department  inspectors  nor  the  police 
are  instructed  to  pick  the  man  up.  He  continues  to  operate 
until  he  is  disposed  to  call  at  the  department  either  in  response 
to  a  complaint  for  other  misconduct  or  to  get  his  license  renewed. 
Perhaps  at  such  time  his  license  may  be  taken  up  because  of  his 
criminal  record. 

The  vices  of  such  a  procedure  are  obvious.  No  license  should 
be  issued  until  all  the  available  police  information  with  refer- 
ence to  the  applicant  has  been  obtained.  No  applicant  should  be 


254       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

permitted  to  act  as  messenger  between  the  License  Department 
and  the  Police  Department.  The  police  investigation  should  he 
made  by  able-bodied  men  and  all  reports  should  be  signed  and 
dated  by  the  officer  submitting  them.  The  police  should  be  re- 
quired actively  to  co-operate  in  picking  up  the  licenses  of  per- 
sons improperly  holding  them.  The  applicant's  false  statement 
as  to  his  criminal  record  should  automatically  cancel  his  license. 
While  licenses  expire  on  April  1st,  the  department  permits  men 
to  operate  for  as  much  as  six  months  thereafter  without  renewal 
of  their  licenses.  In  short,  for  aught  that  the  authorities  do 
to  prevent,  a  convict  once  licensed  —  and  that  does  not  appear  to 
be  difficult  to  achieve  —  may  operate  unmolested  for  eighteen 
months. 

These  conditions  demand  remedy.  If  the  License  Department 
is  to  retain  jurisdiction,  its  administrative  methods  must  be 
changed  along  the  lines  above  mentioned.  Doubtless  too,  much 
of  the  personnel  in  the  Division  of  Licensed  Vehicles  should  be 
changed.  Upon  that  assumption  the  divided  duty  and  responsi- 
bility between  the  Police  and  License  Departments  would  persist. 
That  may  warrant  the  transfer  of  the  jurisdiction  to  the  Police 
Department,  which  alone  has  adequate  force  and  equipment  for 
investigation.  That,  however,  would  disrupt  the  centralization: 
of  licensing  jurisdiction  effected  for  good  reason  in  1914  and,, 
moreover,  the  discharge  of  licensing  functions  by  the  Police  De- 
partment has,  in  the  past,  and  continues  as  to  Steam  Boiler  in- 
spection and  licensing,  to  be  unsatisfactory.  Upon  these  matters 
the  Committee  submits  no  recommendation  for  legislation,  for 
it  assumes  that  in  the  revision  of  the  City  Charter  there  will  be 
a  separation  of  the  structure  of  the  City  Government  from  the 
administrative  code  thereunder,  the  latter  to  be  adopted  by  the 
local  authorities,  together  with  jurisdiction  vested  in  them  to 
abolish  and  combine  or  consolidate  existing  bureaus.  The  dis- 
position, then,  of  the  licensing  function  as  to  taxicab  drivers 
would  be  for  the  local  authorities  to  determine. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  255 


THE  ADMINISTRATION  OF  THE  DEPARTMENT  OF 
MARKETS. 

The  Committee's  investigation  of  the  Department  of 
Markets  leaves  no  doubt  upon  the  fact  that,  under  the  administra- 
tion of  Commissioner  Edwin  J.  O'Malley,  that  department, 
created  as  a  public  agency  to  combat  and  control  the  rising  cost 
of  food  to  the  people  of  New  York  City,  has  been  perverted  into 
a  vehicle  for  the  levy  of  "  graft  "  and  the  play  of  political  favor- 
itism, the  cost  of  which  must  inevitably  have  been  passed  on  to 
the  public. 

The  Establishment  of  the  Department. 

Prior  to  the  enactment  of  the  Farms  and  Markets  Law  by  Chap- 
ter 802  of  the  Laws  of  1917,  public  markets  in  the  City  of  New 
York,  such  as  the  Washington  M'arket,  the  West  Washington 
Market  and  Jefferson  Market,  had  for  many  years  been  under  the 
jurisdiction  of  the  respective  Borough  Presidents  as  to  their 
physical  maintenance  and  of  the  Department  of  Finance  as  to  the 
fixation  and  collection  of  rentals  for  space  therein.  During  all 
that  period  no  breath  of  scandal  attended  the  administration  of 
the  markets  and  that  situation  continued  during  the  brief  period 
in  the  closing  days  of  the  administration  of  Mayor  Mitchel  during 
which  the  markets  were  administered  upon  the  plan  authorized 
by  the  legislation  of  1917. 

That  legislation  (L.  1917,  Ch.  802,  Sect.  71)  authorized  the 
Board  of  Estimate  and  Apportionment,  by  resolution  approved 
by  the  Board  of  Aldermen,  to  establish  a  Department  of  Markets, 
headed  by  a  Commissioner,  appointed  and  removable  at  pleasure 
by  the  Mayor.  Such  resolutions  were  duly  adopted  by  the  respec- 
tive Boards  in  June  and  July  1917. 

Sections  72  and  74  define  the  jurisdiction  of  the  department, 
concentrating  in  it  all  the  jurisdiction  previously  exercised  by  the 
Borough  Presidents  and  by  the  Finance  Department.  The  Com- 
missioner was  authorized  to  make  rules  governing  the  markets, 
subject  to  the  approval  of  the  Board  of  Estimate  and  it  was  pro- 
vided (Section  81)  that  all  stands  and  stalls  in  such  market  shall 
be  rented  on  permits  issued  by  the  Commissioner  or  a  subordinate 
designated  by  him. 


256       INVESTIGATION  OF  AFFAIES  OF  NEW  YORK  CITY 

The  Rules. 

In  1919  such  rules  were  duly  adopted  by  the  local  authorities. 
It  has  been  the  administration  of  them  which  has  provided  such 
a  fruitful  field  of  graft.  They  provided,  among  other  things,  that : 

"A  market,  stand  may  be  occupied  only  under  a  revocable 
permit"  (Rule  1  (a).) 

"All  permits  are  for  a  bi-weekly  period  and  may  be  revoked 
or  terminated  by  the  Commissioner  of  Public  Markets  at  the 
end  of  any  such  period,  if,  in  his  judgment,  the  public  inter- 
est requires  it,  or  at  such  times  or  sooner,  for  a  violation  of 
any  of  the  rules  and  regulations  of  the  department." 
(Rule  1  (b).) 

"  Permits  for  markets  stands  are  personal  to  the  individual, 
corporation,  association  or  partnership  named  therein  and 
shall  not  be  assigned  or  transferred  without  the  written  con- 
sent of  the  Department  of  Markets."  (Rule  4.) 

"  No  market  stand  or  any  part  thereof  shall  be  sublet  or 
assigned  or  used  by  or  for  the  business  of  any  person,  corpo- 
ration, association  or  partnership  other  than  that  designated 
in  the  permit  ....  without  the  written  consent  of  the 
Commissioner  of  Public  Markets."  (Rule  5.) 

The  Rules  Administered. 

The  provisions  of  these  rules  are  not  required  by  any  statute. 
They  constitute  the  exercise  of  a  discretion  granted  by  statute  to 
the  local  authorities.  It  has  been  the  apparently  arbitrary  power, 
which  they  give  to  the  Commissioner  to  revoke  permits  and  to 
approve  transfers,  which  has  facilitated  the  collection  of  graft  and 
the  attempts  so  to  do.  These  have  been  perpetrated  so  frequently 
and  so  boldly  through  the  active  agency  of  one  Charles  A.  Winter, 
General  Inspector  of  the  Department  and  an  employee  in  the 
exempt  class,  that  Commissioner  O'Malley  must  have  been  incred- 
ibly stupid  and  incompetent,  if  he  did  not  know  and  approve  of 
them.  A  number  of  instances  are  detailed  hereinafter,  including 
one  in  which  it  was  testified  that  O'Malley  himself  received  $1500, 
in  cash  after  "  inducing  "  a  standholder  in  Washington  Market, 
whose  permit  was  revocable  by  the  Commissioner  under  the  rules, 
to  sell  a  piece  of  property  outside  the  market  to  the  telephone  com- 
pany. The  receipt  of  this  money  O'Malley  denied,  but  at  the 
outset  of  cross-examination  upon  this  and  other  features  of  his 
administration,  he  declined  to  be  questioned  and  fled  from  the 
witness  stand. 


REPOBT  OF  JOINT  LEGISLATIVE  COMMITTEE  257 

Mr.  O'Malley's  predecessor  as  Commissioner  had  been  Dr. 
Jonathan  0.  Day,  who  had  been  removed  by  the  Mayor  after 
charges  of  misconduct  had  been  made  against  him  and  after  he 
had  made  similar  charges  against  O'Malley,  who  was  a  deputy 
under  him  and  whose  exit  from  the  department  he  compelled. 
Shortly  after  leaving  the  Market  Department  O'Malley  was  ap- 
pointed a  Deputy  Commissioner  in  the  Department  of  Public 
Welfare  and  after  Dr.  Day's  removal  he  was  appointed  as  his 
successor  by  the  Mayor. 

Such  evidence  of  corruption  in  the  Market  Department,  as  was 
developed  by  the  Committee,  was  turned  over  to  District  Attorney 
Swann,  in  the  expectation  that  he  would  make  it  the  basis  of  fur- 
ther investigation  and  prosecution,  but  the  District  Attorney  de- 
clined to  proceed.  While  permittees  of  the  department  were  tes- 
tifying before  the  Committee  to  the  extortions  practiced  or  at- 
tempted upon  them,  O'Malley  announced  the  revocation  of  their 
permits.  This  was  obviously  an  attempt  to  terrorize  other  per- 
mittees and  to  prevent  their  testifying  to  the  facts.  The  Com- 
mittee publicly  denounced  such  tactics  and  demanded  O'Malley's 
removal  by  the  Mayor.  The  Mayor  declined  to  take  such  action, 
but  the  revocations  were  rescinded  and  Winter  was  dismissed 
from  the  department.  O'Malley  remained  and  was  reappointed  as 
Commissioner. 

No  change  of  state  law  is  suggested  by  the  grave  maladminis- 
tration of  the  Market  Department,  for  it  should  not  be  necessary 
to  provide  by  law  that  permits  should  not  be  made  revocable  at 
will.  Indeed,  the  courts  have  held  in  litigations  precipitated  by 
the  Commissioner's  attempts  to  exceed  his  power,  that  his  discre- 
tion to  revoke  mlist  be  reasonably  exercised  and  may  not  be 
capricious  or  arbitrary.  The  Commissioner  has,  however,  dis- 
regarded this  limitation  in  other  cases  not  before  the  Court. 
Clearly  he  should  not  have  even  apparent  arbitrary  power  and 
the  rules  should  be  amended  by  the  local  authorities  so  that  per- 
mits must  be  transferred  except  for  cause  and  may  not  be  revoked 
except  for  cause,  such  cause  to  include  any  attempt  to  monopolize 
the  facilities  of  any  of  the  public  markets. 

THE  HASLOB  CASE 
Negotiations  With  Whiting. 

Christian  Haslob  is  a  retail  butcher  in  Washington  Market  for 
20  years  (Haslob  644  &  648).  His  firm  does  about  $250,000  worth 
of  business  a  year  (645).   They  have  two  stands  and  storage  space 
9 


•*. 

258       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

(644-647).  They  bought  one  stand  from  Stark  (649)  for  $2?000 
five  or  six  years  ago  and  had  no  trouble  in  getting  the  transfer 
from  the  Collector  of  City  Revenue  (649)  who  then  had  jurisdic- 
tion. They  agreed  to  buy  the  other  stand  from  one  Whiting  for 
$650  (651)  and  it  was  finally  transferred  in  May,  1920  (650), 
but  not  until  a  money  payment  had  been  made  therefor. 

First  Visit  to  Markets  Department,  Refusal. 

Having  arranged  to  buy  Whiting's  stand,  Haslob  went  to  the 
Markets  Department  to  have  the  permit  transferred  from  Whit- 
ing to  himself  (651).  Mr.  Bird,  secretary  of  the  Department, 
told  him  he  could  not  have  the  transfer  made,  because  he  had 
filed  no  written  application  for  the  stand.  About  six  months 
later  Haslob  talked  to  Winter  about  the  matter  (653). 

Negotiations  With  Winter. 

Haslob' s  testimony  is:  "I  asked  him  if  he  couldn't  do  some- 
thing for  me,  trying  to  get  that  stand.  *  He  said  he 
could  *  *  *  I  said  I  was  willing  to  pay  a  thousand  dollars 

*  *    *    and  didn't  care  who  got  it    *    *    *.    He  said  he  would 
come  and  see  me  the  next  day    *    *    *.    He  came  back  the  next 
day  and  I  agreed  to  pay  him  $450    *     *     *    for    *    *    *    get- 
ting my  permit  for  that  stand."  (653  and  654).     Haslob  agreed 
to  have  the  money  ready  the  following  Monday  (656).     On  the 
Monday  following,  "  I  met  Mr.  Winter  in  Washington  Market 

*  *    *    about  9  or  10  o'clock  in  the  morning      *  *     at  my 
stand    *    *    *    he  asked  me  to  go  out  with  him,"     (656  and  657). 

Pays  Winter  $450  Bribe. 

They  left  the  market  together  and  went  to  Barclay  street  and 
took  the  elevated  down  Ninth  avenue.  Haslob  took  the  cash  from 
his  safe  out  of  Saturday's  receipts  (656  and  657).  This  is  cor- 
roborated by  page  95  of  this  day  book  (Exhibit  42),  the  entry  be- 
ing: "  Saturday,  May  15th,  1920  Part  Payment  on  stand  —  Ex- 
pense $450."  (656,  657  and  658). 

Haslob,  as  they  were  going  south  on  the  Ninth  Avenue  ele- 
vated took  the  $450  from  his  pocket  and  gave  it  to  Winter.  They 
had  no  particular  conversation.  He  didn't  even  say  "  Thank 
you."  They  separated  at  the  Battery  and  Haslob  took  a  train 
right  back  to  the  market.  All  this  was  on  Monday  morning, 
May  17th. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  259 

Second  Visit  to  Markets  Department  —  Receives  Permit. 

Monday  morning  Winter  told  Haslob  that  the  permit  would  be 
ready  for  him.  That  afternoon  Haslob  and  Whiting  went  to 
the  Markets  Department  (660).  They  saw  McGrath,  who  showed 
them  in  to  O'Malley.  Haslob  asked  for  the  permit  and  received 
it  without  delay.  (661).  He  had  not  yet  made  any  written 
application  for  it.  (665). 

THE  HEINEMAN  CASE 

Negotiations  With  McGuiness. 

Joseph  Heineman  has  been  a  retail  butcher  in  Washington 
Market  since  March  1,  1920  (Heineman  668),  and  did  about 
$65,000  worth  of  business  the  first  year.  He  bought  the  stand 
fixtures  from  Peter  McGuiness  for  $4,500  (669). 

Heineman  and  McGuiness  Visit  O'Malley. 

On  February  3  (673)  Heineman  and  McGuiness  went  to 
the  Markets  Department  to  have  the  permit  transferred  (671). 
McGrath  ushered  them  into  O'Malley  who  asked  if  the  stand  was 
for  Heineman's  father,  who  already  had  a,  stand  in  the  market. 
Heineman  said  "  No."  O'Malley  'said  "  Nothing  more  than  can 
be  done  for  the  present  and  I  will  have  my  inspector  investigate  " 
and  asked  Heineman  to  see  Winter  in  the  outer  office  (672). 

They  Talk  With  Winter. 

They  had  to  pass  through  Winter's  office  to  get  to  the  Commis- 
sioner's office  (673).  They  left  O'Malley  and  talked  with  Win- 
ter on  the  way  out.  He  merely  asked  where  the  stand  was  located 
and  where  Heineman  lived  (674). 

Heineman  Summoned  to  Winters  Office  — Request  for  $1,000. 

A  few  days  later  word  was  left  with  Heineman's  father  that 
Winter  wanted  to  see  Heineman  at  the  Market  Department. 
Heineman  went  and  conversed  with  Winter  at  first  in  the  latter's 
office  and  then  Winter  led  him  outside  in  the  main  hall  near  the 
elevators.  Winter  asked  how  much  Heineman  was  paying  for 
the  stand.  Heineman  refused  to  tell.  Winter  said  it  was  custom- 
ary, in  order  to  get  a  permit,  to  pay  something  in  addition  (674). 
"  I  said  I  am  paying  too  high  a  price  and  I  cannot  afford  to  pay 
anything  more."  Winter  said,  "  You  will  have  to  pay  more  " 
and  I  said  "  How  much "  and  Winter  said  "  a  thousand  dol- 
lars." I  said  "  That  is  out  of  the  question,  I  cannot  pay  that " 


, 

260       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

*  *  He  said  my  father  already  had  two  stands  down  there 
and  getting  too  many  in  the  family  *  *  *  he  said  '  you  will 
have  to  get  the  money  somehow  or  other  because  he  won't  accept 
anything  less  '  *  *  *  speaking  of  somebody  else."  (675).  "  He 
was  leaving  the  hall  .and  he  turned  back  and  said,  '  it  is  absolutely 
useless  for  you  to  call  any  of  those  cheap  politicians  in  to  plead 
for  you  '  '•'  (676).  At  this  interview  Winter  brought  Heineman 
downstairs  to  another  department  to  locate  his  residence  on  the 
map  to  see  if  he  lived  in  New  York  City  (678). 

Summoned  a  Second  Time;  Request  Reduced  to  $500 ;  O'Malley 

Comes  In. 

About  a  week  later  Heineman  received  through  his  father 
another  message  to  call  and  see  Winter.  Winter  took  him  into  an 
office  adjoining  the  Commissioner's.  "  He  sat  me  down  and 
wanted  to  know  if  I  had  the  money  ready  for  him  I 

said  that  I  had  no  money  for  him  and  he  said  i  you  will  have  to 
pay  something '  and  I  said  that  I  could  not  afford  any  such 
amount.  '  Well/  he  said,  '  Can  you  pay  $500,  because  he  might 
accept  that  ? '  And  I  said  "  Who  is  he  ?  "  He  said,  '  We  are  not 
mentioning  any  names  now.'  I  told  him  it  was  out  of  the  question, 
that  I  could  not  pay  him  any  $500.  While  we  were  discussing 
this  the  door  opened  from  the  Commissioner's  office  and  Com- 
missioner O'Malley  came  into  the  office.  He  apologized,  said  he 
did  not  know  it  was  occupied  and  he  walked  over  and  took  a  book 
out  of  a  cabinet  and  went  outside  again  *  *  *  into  his  own 
office."  (677). 

Third  Conference  Alone  ivith  Winter. 

Either  at  the  Markets  Department  or  in  Washington  Market, 
Heineman  had  still  another  talk  with  Winter.  "  He  wanted  to 
know  if  I  had  any  money  ready  for  him,  and  I  told  him  '  no '." 
He  told  Winter  he  could  not  pay  him  anything  and  that  he  was 
not  going  to  pay  him  anything  (679). 

Heineman  Sees  Minder;  Gets  Permit  Without  Bribe. 

In  the  meantime  Heineman  had  asked  some  of  his  friends  for 
their  advice  "  in  order  to  get  the  permit  and  avoid  paying  any 
.money  to  the  inspector  "  and  "  to  see  if  they  could  not  do  some- 
thing for  me  to  hurry  the  matter  along."  He  told  them  he  had 
been  asked  to  pay  money  (678).  Mr.  Minder,  the  President  of 
the  Merchants'  Association  at  Washington  Market,  was  one  of 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  261 

these  friends.  Thereafter  Heineman  received  word  both  from  his 
father  and  from  Mr.  Minder  to  call  for  the  permit.  He  then  went 
to  Commissioner  O'Malley  (679!)  with  Mr.  McGuiness.  O'Malley 
insisted  on  Heineman  signing  an  agreement  to  employ  McGuiness 
because  the  latter  was  an  old  man  and  could  not  find  employment. 
He  then  received  the  permit  (680).  This  was  on  February  28, 
1920. 

THE  WOOLSEY  CASE 

Negotiations  with  Yonteff. 

Stephen  Woolsey  has  been  in  the  retail  butter,  cheese  and  egg 
business  in  Washington  Market  since  November,  1913  (Woolsey 
682-683).  The  annual  volume  of  his  business  is  $200,000.  He 
used  to  have  five  stands.  He  now  has  only  two  (683).  He  sold 
the  other  three  to  one  Yonteff  (684).  They  agreed  on  the  price 
about  the  first  of  January,  1920.  It  was  to  be  $5,500. 

First  Visit  to  O'Malley. 

Woolsey  then  went  to  O'Malley's  office  alone  on  January  2nd 
or  3rd  (691),  to  get  the  stands  transferred  (685).  No  one  eke 
was  present,  Woolsey  asked)  O'Malley  to  transfer  the  downstairs 
stands  to  Yonteff.  He  said  he  could  not,  but  if  he  wished  to  surren- 
der the  stand  the  city  would  pay  for  the  fixtures  less  depreciation 
(686).  Woolsey  refused,  saying  that  he  had  worked  eight  years 
building  up  a  business  there  and  could  not  afford  to  sell  it  merely 
for  the  value  of  the  fixtures.  He  was  to  receive  more  than  the 
value  of  the  fixtures  from  Yonteff.  "  I  tried  to  persuade  O'Malley 
to  miake  the  transfer  and  he  said  it  couldn't  be  made  and  I  left." 
O'Malley  said  he  could  surrender  the  stands,  but  he  would  not 
consent  to  making  the  transfer.  (687). 

Attempt  to  get  Someone  to  Intervene. 

Woolsey  next  visited  a  customer  of  his  who  runs  a  restaurant 
in  Brooklyn  where  "  some  men  went  to  have  lunch  that  could  be 
of  assistance."  Woolsey  asked  if  he  knew  of  any  one  that  could 
assist  in  having  the  transfer  made.  He  said  he  would  see.  In 
two  or  three  days  he  replied  that  "  he  couldn't  do  anything  for 
me." 

Second   Visit   to   O'Malley. 

He  then  went  again  about  one  week  later  (690)  to  O'Malley 
alone  (688).  He  again  requested  O'Malley  "to  transfer  the  per- 
mit to  Mr.  Yonteff."  "  He  said  that  he  couldn't  do  it,  if  I  wanted 


' 
262       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

to  surrender  the  stand  I  would  be  paid  *  *  *  for  the  fixtures 
*  ~x~  *  less  depreciation  *  *  *  I  said,  '  I  don't  see  why  it 
is  that  after  working  and  building  up  a  'business  for  eight  years 
that  I  will  have  to  get  rid  of  it  for  less  than  my  fixtures  cost  me 
to  start  in  business.'  "  (689). 

First  Conference  with  the  Stranger. 

Aibout  ten  days  after  his  second  visit  to  O'Malley,  Woolsey 
received  a  telephone  call  from  someone  who  did  not  give  his  name., 
(690)  but  said  "I  understand  you  are  having  trouble  getting 
your  permit  transferred  *  *  *  if  you  will  meet  me  on  the 
corner  of  Barclay  and  Church  Street,  perhaps  I  can  be  of  some 
service  to  you."  Woolsey  said  "  all  right,  I  will  meet  you  there 
in  about  half  an  hour"  (691).  He  went  there  and  saw  a  man 
who  said  he  was  the  one  who  had  telephoned  him.  He  was  of 
medium  size  with  smooth  face  and  refused  to  give  his  name 
(Woolsey  701).  "  He  said  *  *  *  he  could  help  me  out  but 
his  time  and  services  would  'be  worth  something,  and  he  felt  he 
ought  to  be  paid  for  it  *  he  said  that  it  would  cost; 

$1,000     *     *     *     eventually  we  reached  a  price  of  $450  (692) 
and  I  told  the  man  that  I  would  let  him  know  the  next 
day."  (693). 

Conference  between  Woolsey  and  Yonteff. 

The  next  day  Woolsey  told  Yonteff  "  if  you  want  to  pay  $100 
of  this,  I  will  pay  the  rest  "  and  Yonteff  said  "All  right  "  (Wool- 
sey (693).  Yonteff  remembers  only  that  Woolsey  said  "  it  would 
cost  them  something  to  get  this  permit."  Yonteff  volunteered 
(709)  to  contribute  $100  and  so  the  price  became  $5,600. 
(Yonteff  704  and  708). 

Second  Conference  with  the  Stranger. 

The  next  day  Woolsey  met  the  same  man  at  the  same  place. 
Wcolsey  said  he  was  trusting  to  his  honesty  to  put  the  thing 
through.  He  had  never  seen  him  before  and  might  not  know 
him  if  he  saw  him  again.  He  paid  the  man  $450  then  and  there, 
having  cashed  a  check  with  one  of  his  customers  for  $250  and 
taken  $200  out  of  receipts  of  the  business  (Woolsey  694). 

Permit  Issued. 

Two  days  later  Yonteff  received  a  telephone  message  to  call  at 
the  department  as  the  permit  was  ready  for  them  (Woolsey  695). 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  263 

In  the  morning  of  the  same  day  or  the  day  after,  Yonteff  and 
Woolsey  went  to  the  department,  had  a  general  conversation  with 
O'Malley  at  which  no  reference  was  made  to  their  previous  con- 
versations or  the  subject  matter  thereof.  O'Malley  gave  instruc- 
tions to  have  the  permit  issued  to  Yonteff  and  Woolsey  sur- 
rendered his  old  permit.  Yonteff  paid  the  agreed  price  as  later 
changed  to  $5,600.  (Woolsey  697  and  8  and  Yonteff  703 
and  Ex.  48). 

EIA.HN-KLOEBLEIN  CASE 

Steers  &  Menke  Negotiate  with  Kloeblein. 

Frederick  E.  'Menke  is  treasurer  of  'Steers  &  Menke,  Inc.,  a 
corporation  handling  poultry,  calfs,  pigs  and  pork  products 
(Menke  717)  having  been  in  this  business  since  1883  with  its 
main  place  of  business  at  West  Washington  Market.  They  are 
commission  merchants  who  receive  shipments  direct  from  pro- 
ducers. Their  customers  are  wholesalers  and  butchers.  They 
have  seven  stands.  (718).  They  have  known  Albert  Kloeblein 
13  years.  Kloeblein,  individually  and  representing  his  father's 
estate,  had  been  in  business  in  West  Washington  Market  adjacent 
to  Steers  &  Menke  for  25  years.  Kloeblein  was  not  a  "  direct 
receiver."  He  bought  beef  from  slaughter  houses  and  resold 
it.  His  father  died  about  four  or  five  years  ago  (719).  Steers 
&  Menke  negotiated  with  Kloeblein  for  his  stands,  culminating 
in  a  definite  offer  on  March  31,  1921  (720  and  Exh.  50). 
Kloeblein  was  to  have  receipted  for  $100  as  deposit  on  six  stands, 
total  price  to  be  $8,000,  but  did  not  sign  because  of  their  con- 
ference with  O'Malley  (721). 

Menke  and  the  Kloebleins  visit  O'Malley. 

Menke,  Albert  Kloeblein  and  his  brother  James,  went  to 
O'Malley's  office  (Menke  721)  on  March  31.  Albert  Kloeblein 
said  business  was  poor  and  he  wanted  to  sell  out.  He  said  that 
Menke' s  father  and  his  father  had  been  doing  business  alongside 
each  other  for  years  and  he  felt  Steers  &  Menke  should  have  the 
preference  in  transferring  the  stands.  O'Malley  asked  what  terms 
they  had  agreed  upon  and  they  told  him  $8,000.  (Menke  722). 
On  April  1st  Menke  lictated  written  application  accordingly, 
signed  it  ard  direc**"]  thit  it  be  mailed.  He  received  no  reply. 
(Menke  72*;,. 


J 

264       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

Kahn  Negotiates  with  Kloe~blein. 

Adolf  Kahn  was  in  the  butcher  business  for  nine  years  at  723 
Tenth  Avenue.  He  buys  from  slaughter  houses  and  resells  to 
butchers.  (Kahn  731).  He  says  that  for  about  a  year  he  had 
been  negotiating  with  Kloeblein  for  his  stands  and  on  March 
25,  1921  reached  an  oral  agreement  with  him  to  sell  for  $8,000. 
Whereupon  Kahn  mailed  a  written  application  for  the  stands  to 
the  Commissioner  of  Markets  (Kahn  732). 

Kahn  Requests  McManus'  Help. 

Having  made  written  application  for  the  stands,  Kahn  went  to 
see  former  Senator  Thomas  J.  McManus.  One  of  the  market  men 
had  told  him  he  should  get  some  one  of  that  sort  to  intercede 
for  him.  He  (Kahn)  had  had  business  relations  with  McManus 
(Kahn  733)  McManus  said  "  he  would  do  that  for  me."  (Kahn 
734.) 

Kahn,  Kloeblein  &  Menke  Visit  O'M  alley. 

On  the  Saturday  after  his  first  talk  with  McManus,  Kahn  saw 
Kloeblein  and  learned  that  Steers  &  Menke  also  wanted  the 
stands,  Thereupon  he  called  up  McManus  and  made  an  appoint- 
ment to  go  to  O'Malley's  office  at  11  o'clock  on  Monday  and 
arranged  for  Kloeblein  to  be  there  also  (Kahn  734).  They  met 
McManus  downstairs  (735)  at  about  11.30  (736  and  738). 
Before  leaving  his  office  he  drew  and  cashed  a  check  for  $3,000 
being  the  first  check  he  drew  that  day  (733,  6  and  Ex.  53).  On 
the  way  down  he  stopped  at  his  bank  and  cashed  the  check. 
Kahn  claims  that  he  met  his  brother-in-law  at  the  bank  by 
appointment  and  gave  him  the  money,  so  that  he  claims  he  did 
not  have  the  $3,000  with  him  when  he  reached  the  Municipal 
building  (737s).  Downstairs  he  met  first  McManus  and  then 
Kloeblein,  both  by  appointment,  and  introduced  them.  (Kahn 
738  and  739).  They  went  upstairs  and  into  Secretary  McGrath's 
office  (740).  They  were  told  the  Commissioner  was  not  in  and 
that  they  should  wait.  McManus  left  Kloeblein  and  Kahn  there 
(741)  and  came  back  in  about  two  hours  when  all  three  and 
McGrath  went  into  O'Malley's  office  (741).  They  remained 
about  half  an  hour.  McManus  introduced  Kahn  saying,  "  This 
is  a  friend  of  mine,  Mr.  Kahn,  which  I  spoke  to  you  about." 
O'Malley  paid  no  attention  to  Kain,  but  said  to  Kloeblein,  "Are 
you  selling  this  stand  ?  "  He  said,  "  ISTo,  I  have  to  get  rid  of 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  265 

them  on  account  of  my  brother  being  sick."  "  From  the  way 
they  talked,  it  appeared  that  they  were  acquainted  before." 
(743.)  O'Malley  said,  "  You  cannot  sell  these  stands,  you  un- 
derstand that  ?  *  *  *  If  I  knew  you  were  selling  those  stands, 
I  will  take  this  permit  away  from  you."  Kloeblein  said,  "All  I 
am  selling  is  the  contents  of  my  fixtures."  Kloeblein  surrendered 
the  permit  he  had  to  the  Commissioner  and  the  latter  told  Mc- 
Grath  to  make  out  a  permit  to  Kahn.  When  this  was  done  all 
three  left  together.  It  was  about  4  o'clock.  (748.) 

Kloeblein,  who  could  not  be  served  with  process  in  ]STew  York 
or  compelled  to  testify  in  JSTew  Jersey,  where  he  resides,  did,  how- 
ever, make  a  statement  to  an  examiner  for  the  Committee.  He 
stated  that  it  was  about  1  P.  M.  when  they  reached  the  Com- 
missioner of  Markets  office  (McDeirmott  819).  They  waited 
until  3  P.  M.  James  Kloeblein  was  with  them  but  was  told  to 
stay  outside.  When  he  entered  O'Malley's  office  he  saw  tnerc? 
Kahn,  O'Malley,  McGrath  and  both  McManuses,  the  former 
Senator,  and  his  brother,  Charles,  an  Alderman.  (McDermott 
820.)  O'Malley  said  to  Kloeblein,  "  Now,  you  are  not  selling 
these  stands.  Kloeblein  hesitated  and  Senator  McManus  kicked 
his  foot  and  he  refrained  from  replying.  (McDermott  822.) 

Kahn  pays  Kloeblein  only  $6^50. 

On  leaving  O'Malley's  office  Kahn,  Kloeblein  and  McManus 
rode  up  town  in  Kahn'>s  machine,  which  had  been  waiting  outside 
the  Municipal  Building  (748  &  749).  Kloeblein  stated  that 
Alderman  McManus  and  Albert  Kloeblein  were  also  in  the 
machine.  Alderman  McManus  got  out  at  48th  Street  between 
9th  and  10th  Avenues  on  the  north  side  and  entered  a  house. 
Senator  McManus  got  out  a  little  farther  west  (McDermott  822 
&  823).  McManus  left  the  machine  at  49th  Street  and  8th  Ave^ 
nue.  Kloeblein  and  Kahn  reached  Kahn's  office  about  4 :30  p.  M. 
Kahn  then  gave  Kloeblein  a  check  (Exh.  55)  for  $6,250  (749), 
although  he  had  agreed  to  pay  $8,000.  Kahn  testifies :  "  I  told 
him  that  the  stands  cost  me  a  great  deal  more  to  fix  up  than  I 
first  expected  they  were  to  cost  *  *  *  We  battled  for  about  a 
half  hour  and  he  couldn't  get  no  mlore  out  of  me  than  $6,250." 
(750).  There  had  been  no  written  agreement,  and  Kahn  now 
had  the  permit  (753). 

Kloeblein  says  he  asked  Kahn  why  the  check  was  only  for 
$6,250.  Kahn  showed  by  his  checkbook  that  he  had  drawn  a 
check  to  cash  for  $3,000,  and  said  he  had  used  the  cash  for  trans- 


266       INVESTIGATION  OF  AFFAIKS  OF  NEW  YORK  CITY 

feiring  the  stands.  "  Kahn  said  the  $1,750  that  Kloe'blein  did 
not  receive  was  one-half  of  what  it  cost  him  to  get  the  stands, 
that  he  was  standing  one-half  and  Kloeblein  would  have  to  stand 
the  other  half."  (McDermott  823). 

Kahn  Draivs  a  $500  Check  to  McManus. 

On  returning  to  his  office  from  the  Markets  Department  on 
April  llth  Kahn  also  drew  a  check  for  $500  to  Thomas  McManus. 
Kahn  testifies :  "  I  reconsidered  and  I  wouldn't  use  that  check 
*  *  *  I  don't  know  if  it  was  destroyed  or  not."  It  was  replaced 
by  another  check  taken  from  the  back  of  the  book  (Kahn  753  & 
756;  Mass.  775  &  776)  drawn  to  "Bearer"  (Ex.  56)  (Stub  is 
Ex.  57).  Kahn  claims  he  gave  his  check  to  a  bookmaker  named 
Henry  Jones  to  make  a  bet  with  sometime  in  April  on  the  Demp- 
sey-Carpentier  fight.  (754).  Kloeblein  says  he  asked  Kahn  what 
the  check  for  $500  was  for  and  he  replied  "  That  is  for  the  Alder- 
man." Kahn  then  drew  another  check  for  $125.15  to  the  Aeon 
Garage.  This  is  run  by  the  McManuses  and  Kahn  keeps  some  of 
his  trucks  there  (756). 

Maas,  Kahn'e  accountant,  erased  the  words  "  Thomas 
McManus"  on  the  check  stnb  (Ex.  57)  at  Kahn's  direction  and 
wrote  in  the  word  "Bearer"  (Maas  776).  In  the  cash  book 
(Ex.  58),  under  date  of  April  llth  he  originally  entered  "  Thomas 
McManus."  Later  he  applied  ink  eradicator  and  then  entered 
"Bearer"  (Maas  778  &  779;  Osborne  796).  In  the  cashbook 
he  originally  entered  page  50  as  the  page  of  the  ledger  where  this 
item  of  $50'0  would  be  posted  but  eradicated  page  "50  "  and 
wrote  in  "8"  (Maas  778  &  779;  Osborne  796).  He  also 
eradicated  all  entries  on  page  50  of  the  ledger  (Maas  780  &  781) 
on  which  he  had  entered  "  Investment  Market  Stands  "  "  $3,000  " 
and  other  items,  concededly  relating  to  the  cost  of  the  market 
stands.  (Osborne  798).  Maas  also  made  other  eradications  of 
entries  which  he  had  made  in  reference  to  the  $3,000  check  to 
cash  and  $500  to  McManus  (Maas  781  to  791  and  Osborne  794 
to  803). 

Menke  Leamp  of  Transfer  to  Kahn. 

On  a  Tuesday  about  two  weeks  after  April  1st,  having  received 
r-o  reply  to  his  application  of  that  date,  Menke  went  t«»  the  De- 
partment but  was  told  that  the  Commission  was  busy.  His 
secretary,  McGrath,  told  him  that  the  stands  had  been  transferred 
to  Adolph  Kahn  the  day  after  (Menke  724). 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  267 

Conference  at  Kahn's  office  before  testifying. 

Kahn  was  served  with  a  subpoena  on  Saturday,  May  21,  1921, 
to  appear  before  a  sub-committee'  on  Monday,  May  23rd  (Kahn 
757).  The  next  day,  Sunday,  May  22nd,  Kahn  was  at  his  place 
of  business.  His  bookkeeper,  Maas,  was  there  and  so  were  two 
other  men  (758). 

On  Saturday  after  he  was  subpoenaed  there  were  three  tele- 
phone calls  from  his  apartment  to  his  brother-in-law,  Isaac  Gold- 
berg, (Kahn  760;  Jones  730  and  Reardon  728  &  28,  Ex.  51). 

After  leaving  his  office  on  Sunday,  Kahn  went  to  Goldberg's 
home  and  spent  several  hours  there  (Kahn  760,  see  a'bove,  Kahn's 
testimony  that  he  gave  the  $3,000  to  Goldberg).  On  Sunday 
Kahn  phoned  both  to  Goldberg  and  his  visiting  accountant,  Sol. 
Goodman  (Kahn  761,  762  and  Ex.  51). 

On  Monday  morning  before  testifying  Kahn  talked  with  Alder- 
man McManus  in  the  54th  Street  Court  (Kahn  76S&766). 

Phone  calls  by  Kahn  after  testifying. 

Kahn  finished  testifying  before  the  sub-committee  at  8  o'clock, 
May  23rd.  He  had  claimed  that  Sam  Kern  was  one  of  the  two  men 
who  was  at  his  place  of  business  on  Sunday,  May  22nd,  but 
later  admitted  the  falsity  of  that  testimony.  That  evening  he- 
called  up  Mr.  Kern  in  Tarrytown  (762  and  Ex.  51)  and  also  the 
Thomas  J.  McManus  Association  and  Sol.  Goodman,  his  ac- 
countant. (Kahn  763  &  4;  Ex.  51). 

Attempt  to  revoke  Kahn's  permit  after  testifying. 

After  Kahn  testified  'before  the  sub-committee  on  May  23rd. 
he  was  subpoenaed  by  the  Commissioner  of  .Accounts  and  testified 
there.  This  was  repeated  after  he  testified  before  the  sub-com- 
mittee, on  May  25th  (Kahn  766).  The  second  time  he  testified 
before  the  Commissioner  of  Accounts  was  on  June  2nd.  On  the 
4th  of  June  he  received  a  registered  letter  notifying  him  that  his 
permit  had  been  revoked.  He  brought  an  action  to  restrain  such 
revocation  and  obtained  a  temporary  injunction.  The  disposition 
of  the  case  was,  by  agreement  between  the  parties,  delayed  pend- 
ing the  hearings  of  the  Committee  and  Kahn  is  now  in  possession 
of  the  stands. 


v 

268       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

THE  KATENKAMP  CASE 
Receives  Dispossess  Notice. 

Mrs.  Bertha  Katenkamp  had  been  conducting  a  fish  stand  in 
Washington  Market  under  the  permit  of  her  husband  for  about  a 
year  after  his  death  (Katenkamp  844;  Minder  832).  In  August. 
19'20,  she  received  a  dispossess  notice  from  the  Commissioner  of 
Markets  saying  that  she  had  no  permit  to  do  business  in  Washing- 
ton Market  and  must  vacate  on  a  specific  date  stated  therein 
(Katenkamp  845;  Minder  833;  Eggers  855). 

Visit  to  O'Malley. 

As  Minder  was  out  of  town  she  conferred  with  Eggers,  the 
Vice-President  of  the  Washington  Market  Merchants'  Associa- 
tion (Katenkamp  845),  who  is  'also  in  the  fish  business.  She  had 
received  three  notices  from  O'Malley  to  see  him  about  her  permit 
but  she  had  taken  no  notice  of  them  (Eggers  856).  He  (Eggers) 
took  her  to  O'Malley.  Mr.  Turner  who  also  has  a  fish  stand  went 
with  them  to  adjust  his  troubles  also  (Eggers  856;  Katenkamp 
846).  O'Malley  said  the  permit  died  with  her  husband  (Katen- 
kamp 846)  and  she  would  have  to  leave  the  stand.  Mrs.  Katen- 
kamp and  Turner  then  went  into  the  outer  office  and  waited  for 
Eggers  who  remained  behind  with  O'Malley.  They  waited  about 
20  minutes.  Then  he  came  out  and  all  three  left.  (Katenkamp 
847). 

Eggers  says  O'Malley  said  Mrs.  Katenkamp  didn't  live  in  New 
York  City  and  many  residents  wanted  to  get  permits,  who  ought 
to  have  precedence  (-Eggers  858).  He  absolutely  refused  to  issue 
a  permit  to  her. 

Eggers  Talks  with  Winters  and  then  with  Mrs.  Katenkamp. 

Eggers  had  known  Winters  for  several  months  before  he  spoke 
to  Winters  about  the  Katenkamp  case.  Eggers  said  to  Winters : 
"  Mrs.  Katenkamp  is  dependent  upon  the  proceeds  of  this  stand. 
I  would  not  like  to  se  her  put  out,  isn't  there  no  way  of  arranging 
these  matters."  Winters  said,  "No,  I  want  her  out 
We  have  someone  else  for  the  place  "  (Eggers  860  &  861).  Eggers 
said,  "  What  about  Turner  "  ?  Winters  said,  "  Well  we  can  fix 
that  up."  Eggers  said,  "  What  do  you  want  ?"  Winters  said 
"  $500."  (860).  Winters  had  a  "  party  that  was  going  to  give 
Mrs.  Katenkamp  an  amount  of  money  to  get  out  noth- 

ing came  out  of  that,"     (861). 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  269 

Later  on  Eggers  had  other  talks  with  Winters.  The  latter  con- 
tinued to  insist  he  wanted  the  widow  out.  Finally  he  said  he  was 
going  to  Washington  and  "  if  we  could  fix  it  up  for  a  thousand 
dollars"  after  he  got  back  it  would  be  all  right  (862).  Eggers 
told  this  to  Mrs.  Katenkamp  but  she  said  she  didn't  have  the 
money  (Eggers  862  &  Katenkamp  848).  Meanwhile  Winters  was 
in  sight  waiting  at  Eggers'  stand  (Katenkamp  848  &  849),  which 
can  be  seen  clearly  as  it  is  obliquely  across  from  Mrs.  Katen- 
kamp's  (Katenkamp  848  &  Eggers  855). 

When  Winters  returned  from  Washington  he  asked  Eggers 
"  Well  how  did  you  make  out."  He  said,  "  I  can't  do  anything 
with  Mrs.  Katenkamp,  she  has  not  got  the  money  ",  Winters  said. 
"Well,  let  her  get  out."  (9862). 

Eggers  said,  "  Why  do  you  want  to  put  this  woman  out,  she 
is  dependent  upon  this  for  a  living."  He  said,  "  Well,  I  will  tell 
you,  we  will  make  it  $500."  (863). 

Eggers  told  this  to  Mrs.  Katenkamp  but  she  said,  "  I  haven't 
got  it."  Eggers  said  "  Worse  and  worse,  here  is  where  I  throw 
up  my  hands."  Then  Mr.  Minder  "  came  into  the  proposition 
and  she  didn't  put  up  a  nickel."  (Eggers  863). 

Eggers'  various  conversations  with  Mrs.  Katenkamp  took  place 
"  every  day  in  the  week  for  ten  days."  The  talks  always  took 
place  in  Mrs.  Katenkamp' s  stand  and  Winters  was  always  in  sight 
at  Eggers'  stand  (Mrs.  Katenkamp  849). 

Minder 's    Visits   to    O'Malley. 

Minder  was  out  of  town  when  the  permit  was  revoked  and  during 
the  week  or  ten  days  that  Eggers  was  handling  the  matter  for 
Mrs.  Katenkamp  (Minder  832  &  833).  When  he  returned  the 
matter  was  brought  to  his  attention  by  various  members  of  the 
market.  Minder  told  Eggers  to  leave  the  case  in  his  hands.  He 
did  not  know  Mrs.  Katenkamp  very  well  but  had  known  her  hus- 
band fairly  well  (Minder  833).  Minder  then  went  alone  to  see 
O'Malley  and  explained  to  him  that  he  saw  no  reason  why  Mrs. 
Katenkamp  should  be  put  out  of  the  market.  "After  going  into 
it  very  thoroughly  with  the  Commissioner,  he  said  he  would  give 
it  further  consideration."  (Minder  834.)  There  were  two  or 
more  such  visits,  Minder  always  going  alone.  At  first  O'Malley 
said  "she  had  to  go  ".  Minder  pleaded  her  case  (837).  "  I  felt 
that  I  had  .succeeded,  that  he  had  been  mislead  by  people  giving 
him  reports  that  were  not  true,"  (Minder  838). 


270       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

Minder  Confers  with  Mrs.  Katenkamp  and  Egger. 

Egger  reported  to  Minder  his  conversations  with  Winters.  He 
stated  that  it:  was  necessary  to  leave  the  matter  in  the  hands  of 
Winters.  Minder  said  that  he  had  already  been  to  the  Commis- 
sioner of  Markets  direct  and  saw1  no  reason  to  go  through  Winters. 
Egger  said  the  Katenkamp  matter  could  be  settled  and  the  woman 
left  alone  if  she  would  pay  $1,000.  (Minder  835).  She  was  to 
pay  it  to  Egger,  not  for  himself,  but  for  Winters.  Minder  said. 
"  Not  while  I  was  president  of  the  association  would  anything 
go  on  like  that  *  *  *  I  called  Mr.  Egger  and  Mrs..  Katen- 
kamp together  to  see  if  there  was  not  some  way  of  breaking  down 
this  attempt  to  get  the  widow  to  pay  $1,000  *  *  *  and  Mrs. 
Katenkamp  said  that  she  would  be  willing  to  give  $500."  (Minder 
836;  also  Katenkamp  850).  "I  told  her  to  bring  the  $50-0  to 
my  office  *  *  *  she  brought  me  the  $500'  *  *  *  I  had 
my  bookkeeper  take  it,  it  was  then  in  an  envelope  that  had  her 
name  and  the  date  on  the  back  of  it  and  put  it  in  my  safe  for  safe 
keeping  and  I  told  her  that  if  anyone  wanted  it  to  come  and  ask 
me  for  it.  No  one  came.  Afterwards  it  was  returned  to  Mrs. 
Katenkamp."  (Minder  836;  Katenkamp  850). 

Minders  Visit  to  O'Matteys  Office,  October  4,  1920. 

Minder  and  Mrs.  Katenkamp  were  subpoenaed  to  appear  before 
the  C'omtmissioner  of  Accounts  on  October  4,  1920  (Minder  838 
and  Katenkamp  850.)  Just  before  appearing,  they  went  to 
O'Malley's  office  (Minder  838).  Mrs.  Katenkamp  waited  outside 
of  O'Malley's  office  for  Minder,  who  went  in  and  stayed  there  ten 
or  fifteen  minutes  (Katenkamp  850  to  852).  Minder  told 
O'Malley  that  they  were  subpoenaed  to  the  Commissioner  of 
Accounts  office.  He  said  he  knew  it,  that  the  entire  matter  was 
in  Hirshfield's  hand  and  we  would  leave  it  rest  there,  that  people 
were  talking  about  graft,  giving  newspaper  stories  out  and  he  was 
going  to  get  to  the  bottom  of  it.  "  I  told  him  *  that  all 

this  stuff  getting  into  the  papers1  would  do  harm  and  would  do 
harm,  to  Mrs.  Katenkamp  *  *  and  would  embarrass  me, 

himself  and  the  'administration  and  that  while  I  had  no  definite 
proof  that  graft  was  asked  for,  except  by  word  of  mouth,  I  did 
not  feel  inclined  to  drag  anybody  into  it  *  he  asked  me 

whether  it  was  a  positive  fact  that  I  could  say  there  was  a  graft 
request,  I  told  him  I  could  *  *  *  yet  I  could  not  prove  it, 
that  it  was  unfair  to  drag  Mr.  Winters7  name  into  it  when  it 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  271 

wasn't  my  party.  I  told  him  I  was  going  to  the  Commissioner 
of  Accounts  office  and  tell  the  same  thing  and  try  to  leave  out  Mr. 
Winters'  name  if  I  possibly  could,  because  it  was  to  my  mind 
unfair  *  *  unless  I  have  some  specific  proof  that 

I  should  defame  his  character  *  *  *  he  thought  that  was 
mighty  nice  and  if  that  was  the  case  he  thanked  me  for  doing  it 
*  *  *  I  asked  him  if  I  could  assure  Mrs.  Katenkamp,  who  wa& 
in  the  outer  hall  waiting  for  me,  of  that  fact,  and  would  she  get 
her  permit  and  be  able  to  continue  her  business  if  she  would 
follow  my  instructions  and  testify  and  try  to  leave  Mr.  Winters' 
name  out  of  it  before  Mr.  Hirshfield  *  *  *  he  assured  me 
that  that  would  be  the  case."  (Minder  839  &  840). 

After  testifying  Minder  returned  to  O'Malley's  office.  It  was 
late  in  the  afternoon.  O'Malley  was  out.  "  I  told  him  (McGrath) 
to  tell  the  commissioner  that  we  had  testified  before  the  Com- 
missioner of  Accounts  and  I  felt  that  everything  would  be 
allright."  (Minder  841).  Minder  did  not  tell  O'Malley  nor 
Hirshfield  nor  anybody  in  their  office  that  he  was  holding  the 
$500.  He  held  it  about  a  week  or  ten  days  "  inasmuch  as  Mrs. 
Katenkamp  was  frightened  to  death  for  fear  she  would  give  it,  as 
she  threatened  to  do,  to  have  peace  as  she  called  it."  It  has  now 
been  returned  to  Mrs.  Katenkamp.  (Minder  842).  Mrs.  Katen- 
kamp did  not  receive  her  permit  until  January  27,  1921. 

Commissioner  of  Accounts'  Investigations. 

On  October  1,  19'20,  O'Malley  wrote  Hirshfield  a  letter  (Com- 
mittee Exhi.  No.  41)  in  reference  to  the  Katenkamp  case  (864). 
requesting  an  investigation  because  of  "  ugly  rumors  that  *  *  * 
if  she  would  pay  money  to  some  employee  of  this  Department 
he  would  be  able  to  fix  the  matter  up"  (866).  On 
November  27,  192O,  O'Malley  wrote  Hirshfield  inquiring  as  to 
the  result  of  the  investigation  (867).  He  again  wrote  on  Jan- 
uary 3,  1921,  to  the  same  effect,  stating  "  it  has  been  and  still 
is  my  opinion  that  Mrs.  Katenkamp  should  vacate  this  stand 
but  have  taken  no  action  pending  a  reply  from  you."  (868). 

Minder's  testimony  before  Hirshfield  on  October  4,  1920  (869) 
shows  that  he  reluctantly  mentioned  Winter's  name  as  the  one 
as  to  whom  there  were  such  "ugly  rumors"  (871).  Mrs.  Kat- 
enkamp testified  "  I  was  not  asked  to  pay.  It  is  rumored  around 
there  that  if  you  want  to  stay  there  you  have  to  pay  *  *  *.  They 
won't  ask  direct.  A  gentleman  came  to  me  and  said  if  I  wanted 


•*. 

272       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

to  stay  it  would  cost  me  money  and  I  said  I  didn't  have  any 
money  *  *  *  First  a  Mr.  Turner  came.  He  said  he  under- 
stood I  would  have  to  pay  *  *  *.  He  didn't  mention  any 
names"  (879).  Asked  if  anyone  else  told  her  anything  about 
paying,  she  said  "  No  "  (880).  Neither  Turner  nor  Winter 
were  examined.  (88-2). 

On  January  22,  1921,  Hirshfield  submitted  his  report  to  the 
Mayor  (882),  suppressing  the  fact  that  Winter's  name  was  men- 
tioned in  the  testimony  (883).  He  concluded  "  Nothing  has 
been  disclosed  from  the  examination  to  sustain  the  assertion  that 
moneys  had  been  demanded  or  received  by  any  employee  of  the 
Department"  (884).  He  recommended  that  Mrs.  Katenkamp 
be  allowed  to  continue  the  occupancy  of  the  stand  (885).  On 
January  26,  1921,  O'Malley  acknowledged  receipt  of  a  copy  of 
this  report  and  wrote  "  Your  suggestion  as  to  allowing  Mrs.  Kat- 
enkamp to  remain  in  occupancy  of  this  stand  will  be  followed." 
(886). 

THE  TURNER  CASE 

Egger  and  Turner  Visit  O'Malley. 

James  E.  Turner,  as  well  as  Mrs.  Katenkamp,  came  to  Egger 
"  with  his  troubles."  He  had  also  received  a  notice  to  vacate. 
He  had  succeeded  to  his  uncle's  business.  His  uncle  had  had 
a  permit  for  many  years,  but  he  had  none.  Egger  is  not  sure 
whether  Turner  had  received  a  notice  to  vacate  or  not  (Egger 
856  &  7).  Turner  and  Mrs.  Katenkamp  both  went  with  Egger 
at  the  same  time  to  see  O'Malley  (Egger  898).  (Turner  967). 
O^Malley  refused  to  issue  him  a  permit  because  he  lived  in  Jer- 
sey City  (Turner  968). 

Egger's  Talk  with  Winters. 

Later  when  Egger  was  talking  to  Winter  about  Mrs.  Katen- 
kamp's  case  he  said  "  What  about  Turner  ?  "  Winter  said,  "  Well, 
we  can  fix  that  up."  E'gger  said,  "  What  do  you  want,  "  Win- 
ter said  "  $500."  (Egger  860).  Egger  told  Turner  that  if  he 
wanted  to  stay  in  the  market  he  would  have  to  put  up  $500. 
"  So  I  took  Winter  over  to  Mr.  Turner  and  said  '  Jim  meet 
Mr.  Winter,'  and  he  met  him  and  that  was  all."  (Egger  860- 
861). 

Turner's  First  Talk  with  Winters. 

This  introduction  took  place  about  one  wtek  after  Turner, 
Egger  and  Mrs.  Katenkamp  had  been  at  O'Malley's  office 


REPOKT  OF  JOINT  LEGISLATIVE  COMMITTEE  273 

(Turner  972).  Egger  had  told  Turner  that  Winter  had  said 
Turner  would  have  to  pay  $500.  (Turner  974).  Turner  claims 
he  told  Winter  as  well  as  Egger  that  he  would  fight  the  matter 
in  the  courts  (975). 

Turner  Gets  His  Permit. 

Later  he  told  Egger  that  it  would  probably  cost  him  $1,000  in 
the  courts  and  that  as  long  as  his  daughter  was  sick  he  would!  as 
soon  pay  $500  to  Winter  to  get  his  permit  (976).  Then  Winter 
came  and  told  Turner  the  permit  was  ready  and  he  should  go  up 
and  get  it  (977). 

Turner  Pays  $500  to  Winters. 

A  couple  of  days  after  he  got  his  permit  Turner  paid  Winter 
$500  in  bills  at  Broadway  in  front  of  176  Broadway  (977-980). 
He  took  the  money  from  his  receipts  (977).  He  made  no  book 
entry  of  this  item  (978).  This  was  in  August,  1920,  about  1 
o'clock.  Ete  made  the  appointment  with  Winters  about  an  hour 
earlier  at  the  market  (979).  Winters  suggested  the  place  (981). 
Turner  said,  "  Here  is  a  present  for  you  for  what  you  done  for 
me"  (981). 

THE  CASE  OF  BARNET  COHEIT 

Barnet  Cohen  was  in  the  live  poultry  business  at  39  and  41 
Loew  Avenue,  West  Washington  Market,  first  in  connection  with 
Harry  Bail,  Inc.  and  then  as  a  member  of  the  firm  of  Cohen  and 
Jacobs  (Cohen  929).  When  that  firm  got  into  difficulties,  Com- 
missioner O'Malley  sent  for  its  members  in  March  1920.  Cohen 
responded  and  O'Malley  induced  him  to  surrender  the  permit  for 
the  Loew  Avenue  stands,  which  were  given  to  one  Rothberg,  on 
the  promise  that  Cohen  would  receive  a  permit  for  certain  other 
stands  then  held  by  a  saloonkeeper  (Cohen  930-32). 

Cohen  called  repeatedly  at  the  Commissioner's  office  to  get  the 
promised  permit  but  without  success.  One  Thursday  O'Malley 
called  Cohen  at  his  home  by  phone  and  told  Cohen  td  come  to  his 
office  the  next  day,  Friday.  Cohen  went  and  waited  all  day. 
(Cohen  933). 

O'Malley  gives  Cohen  an  Auto  ride. 

After  waiting  all  day  O'Malley  told  Cohen  he  would  give  him 
a  ride  in  the  machine.  (Cohen  933).  Cohen  took  a  machine 
ride  with  O'Malley.  The  machine  was  waiting  at  the  Municipal 


A 

271       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

Building.  They  rode  up  to  48th  Street  and  Broadway,  O'Malley 
and  Cohen  in  the  car.  (Cohen  934).  Both  left  the  car  at  48th 
Street,  (Cohen  935).  During  the  ride  to  48th  Street  O'Malley 
asked  Cohen  how  much  money  he  had  to  invest  and  was  told  Cohen 
could  get  $10,000  from  his  brother-in-law.  O'Malley  said  to  see 
him  next  week.  (Cohen  933). 

llillman  comes  into  the  Case. 

The  following  Monday  or  Tuesday,  Cohen  called  at  the  De- 
partment of  Markets  and  spoke  to  McGrath,  secretary  to  Com- 
missioner O'Malley.  McGrath  told  him  that  one  Hillman,  a 
member  of  a  firm  which  held  stands  in  the  market,  was  with  the 
Commissioner  "  too  many  times  "  and  that  the  Commissioner  had 
told  McGrath,  "  I  give  it  away  to  Hillman  —  them  stands." 
(Cohen  935).  The  same  day  when  MdGrath  told  Cohen  about 
Hillman's  getting  the  stands  (of  the  saloonkeeper),  Cohen  went 
to  Commissioner  O'Malley  and  asked  about  it  O'Malley  told 
Cohen  the  stands  were  given  to  Hillman  "  because  you  (Cohen) 
wasn't  such  a  good  customer  for  me."  (Cohen  936).  O'Malley 
had  suggested  that  Cohen  and  one  Price  (Cohen  937),  Hillman's 
brother-in-law,  should  together  occupy  these  stands  (Cohen  938). 
O'Malley  also  told  Cohen  people  offered  him  money  for  the 
stands.  (Cohen  939); 

Cohen  Tells  Price  about  O'Malley's  Suggestion. 

Cohen  told  Price  that  O'Malley  suggested  that  Cohen  and  Price 
get  the  stands  together  and  begged  him  to  "  Have  a  heart."  Price 
told  Cohen  to  go  to  Mr.  Hillman,  Price's  brother-in-law  and  that 
whatever  Hillman  said  Price  would  do.  (Cohen  945). 

"  For  Money  I  got  Honey." 

Cohen  went  to  Hillman  with  his  story  and  Hillman,  referring 
to  the  stands  obtained  by  him  for  Price  said  to  Cohen,  "  For 
money  I  got  honey."  (Cohen  946). 

O'Malley  objected  to  Cohen  because  he  said  Cohen  voted  Re- 
publican, so  Cohen  was  told  by  O'Malley  and  by  others  (Cohen 
846).  But  Cohen  is  a  member  of  the  Thomas  M.  Farley  Associa- 
tion and  is  a  member  of  the  regular  Democratic  organization 
(Cohen  947). 

Cohens  Vain  Appeal  to  the  Commissioner  of  Accounts. 

Cohen  appealed  to  the  Commissioner  of  Accounts  and  was  re- 
ferred to  Mr.  Klein.  Klein  told  Cohen  he  could  not  do  anything 


EEPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  275 

for  him  (Cohen  949).  Klein  told  him  to  see  Commissioner 
Hirshfield.  Cohen  went  to  Commissioner  Hirshfield  and 
when  Hirshfield  saw  him  he  would  go  through  some 
door  into  another  room,  so  Cohen  could  not  see  him.  Cohen  had 
been  to  the  office  a  great  number  of  times  (Cohen  950).  Finally 
he  spoke  to  a  man  in  the  office  of  Hirshfield  —  he  thinks  Mr.  Mc- 
Ginley,  Chief  of  'Staff,  and  Cohen  was  told  to  put  his  story  on 
paper  and  it  would  be  presented  to  Hirshfield,  and  a  report  made 
to  the  Mayor  or  to  the  Commissioner  of  Markets.  Cohen  came 
back  a  few  days  later  and  was  told  "Hirshfield  did  not  want  to 
sign  the  papers  for  you  —  we  cannot  do  anything  for  you.v 
Cohen  wanted  to  see  Hirshfield  and  Hirshfield  told  the  officer  to 
"  Throw  him  out,  that  crook,  from  this  building."  (Cohen  950). 
Hirshfield  had  on  a  previous  occasion  found  Cohen's  testimony 
against  Dr.  Day  credible  and  in  still  another  investigation  by 
Hirshfield's  office  one  of  his  subordinates  reported  that  O'Malley 
admitted  that  he  had  suggested  that  Cohen  and  Price  should  join 
in  the  occupancy  of  market  stands. 

THE  LEWIS  CASES 

George  H.  Lewis  &  Son  Inc.  originally  had  seven  stands  in 
West  Washington  Market  —  43,  45,  47,  49  Grace  Avenue  and 
44,  46,  48  Thompson  Avenue,  for  which  the  corporation  received 
permits  (Lewis  984).  They  acquired  three  more  stands  —  25, 
27,  29  Lawton  Avenue  —  from  F.  H.  Fechtman  &  Co.  Inc. 
These  stands  are  about  lO'O  feet  removed  from  the  other  seven 
stands  held  by  Lewis  (Lewis  986). 

When  the  stands  were  acquired  from  Fechtman  an  application 
was  made  by  Lewis  &  Sons  Inc.  through  its  vice  president,  John 
L.  Luger,  to  the  Department  of  Markets  for  permits  and  permis- 
sion to  effect  the  transfer  from  the  Fechtman  Company  to  Lewis. 
Luger  said  he  thought  it  would  cost  him  $300  to  have  the  trans- 
fer made.  (Lewis  990). 

Lewis  pays  Luger  $300. 

Lewis  paid  Luger  $300  on  September  27,  1920  to  have  the 
transfer  of  the  Fechtman  stands  effected  (Lewis  990).  Luger  did 
not  tell  lewis  what  the  $300  was  for  (Lewis  991).  In  four  or 
five  days,  the  permit  desired  was  issued  (Lewis  992). 

Inspector  Winters  in -the  Case. 

When  Fechtman  wanted  to  sell  the  stands  Luger  said  some  sort 
of  investigation  would  be  made.  Lewis  saw  Inspector  Winters 


276       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

around  the  market  and  Fechtman  told  Lewis  that  Winters  had 
called  on  him  (Lewis  992). 

Permit  No.  416  was  issued  October  1,  1920  to  G.  H.  Lewis  & 
Sons  Co.  Inc.,  for  stands  No.  25,  27,  29  Lawton  Avenue,  West 
Washington  Market  at  a  rental  of  $27.50'  weekly.  Receipt  signed 
by  G.  Hi  Lewis,  &  Sons  Inc.,  John  L.  Luger,  vice  president;  wit- 
ness —  Charles  A.  Winter. 

Lewis  sells  a  Stand  to  Benjamin. 

The  sale  of  one  stand  by  Lewis  to  Mr.  Benjamin  of  West  Wash- 
ington Hotel  Supply  Company  cost  $350  (paid  by  Lewis)  for  the 
transfer  of  the  permit.  Luger  attended  to  the  transfer  (Lewis 
993).  receiving  $350  from  Lewis  to  effect  it. 

Luger  tells  Lewis  of  his  Political  Affiliations. 

Luger  told  Lewis  he  was  a  member  of  some  political  organiza- 
tion and  through  that  he  would  be  able  to  get  the  transfer  put 
through.  (Lewis  994).  He  did. 

A  Third  Transfer  Effected  by  Luger. 

Luger  told  Lewis  it  would  cost  $1,000  to1  get  approval  of  a 
transfer  of  stands  from  Lewis  to  Dorato  Cerutti  Company.  Lewis 
paid  Luger  the  $1,000  oil  April  13,  1921  in  cash  for  this  purpose 
and  the  transfer  was  effected  the  same  day. 

Luger3  s  Connections  and  Admissions. 

John  L.  Luger  was  vice  president  of  George  H.  Lewis  &  Sons 
Inc.  on  a  salary  of  $75  a  week  (Luger  999). 

Luger  admits  getting  from  Lewis  $300  and  $350  in  connection, 
respectively,  with  Fechtman  and  Benjamin  transfers  (Luger 
999).  He  also  admits  getting  $1,000  with  reference  to  the  third 
transfer  (Luger  1,000).  Luger  knew  Inspector  Winter  of  De- 
partment of  Markets  for  about  1  year  (Luger  1,000). 

Luger  is  a  member  of  the  Tammany  Hall  —  General  Com- 
mittee and  of  the  Peter  J.  Dooling  Association  (Luger  1,000). 
He  had  been  a  district  captain  for  threes  or  four  years  prior  to 
working  for  Lewis  &  Sons  (Luger  1,000)  and  a  member  of  Dool- 
ing Club  for  five  years. 


sees  Of  Motley  Re  Fechtman  Transfer. 
Luger  called  on  O'Malley  at  the  Department  of  Markets  and 
asked  for  transfer  of  Fechtman  stands  to  Lewis  (Luger  1002). 


EEPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  277 

O'Malley  refused  because  Lewis  already  had  seven  stands. 
(Luger  1003).  After  O'Malley' s  refusal  Luger  went  to  the  Peter 
J.  DooKng  Association  and  told  his  troubles  to1  John  Burke,  secre- 
tary of  the  club,  and  Burke  suggested  that  Luger  and  he  call  on 
O'Malley  (Luger  1004). 

Mr.  Burke  and  Luger  called  on  O'Malley  and  Burke  told 
O'Malley  that  Luger  was  an  active  worker  in  the  organization, 
and  he,  Burke>  thought  Luger  was  entitled  to  be  favored  with  the 
transfer  (Luger  1005).  O'Malley  still  mentioned  about  the  seven 
stands  already  held  by  Lewis  and  Burke  and  Luger  left  (Luger 
1005). 

Permit  Obtained  next  Morning. 

The  next  morning  Mr.  Burke  went  back  to  see  O'Malley.  He 
told  Luger  he  had  been  there.  Then  Luger  went  to  see  O'Malley 
(Luger  1006).  O'Malley  told  Luger  he  would  get  the  transfer  of 
the  permit  because  he  was  an  active  worker  for  the  organization 
and  the  permit  was  issued.  Winter  signed  the  permit  as  a  witness 
(Luger  1006),  having  previously  called  at  the  market  to  investi- 
gate and  spoken  to  Luger  while  there  and  having  recommended  the 
approval  of  the  transfer  in  his  report  dated  September  27th,  the 
same  day  as  Luger  received  the  $300  payment. 

Luger  on  the  Benjamin  Transfer. 

Luger  originally  applied  to  the  Department  of  Markets  for 
permission  to*  have  Benjamin  store  materials  in  one  of  Lewis7 
stands  by  letter  dated  November  13,  1920  (Luger  1010). 

Winter  made  a  report  to  O'Malley  six  days  later  suggesting  that 
permission  could  be  granted  and  the  purpose  effected  by  transfer 
of  the  stand  from  Lewis  to  Benjamin  (Luger  1011).  Luger 
waited  for  an  answer  to  his  letter  and  then  called  at  the  Depart- 
ment of  Markets  (Luger  1011).  He  spoke  to  O'Malley,  telling 
him  a  personal  friend  of  his  (Luger's)  wanted  the  stand  and  asked 
for  the  transfer  (Luger  1012).  He  had  two  or  three  conversa- 
tions with  O'Malley  on  the  subject  and  then  finally  obtained  the 
permit  for  transfer  to  Benjamin  (Luger  1013).  In  this  connec- 
tion he  got  $350  from  Lewis  (Luger  1013). 

Luger  also  Handles  the  Third  Transfer. 

In  March  Lewis  wanted  to  sell  four  more  stands  and  told  Luger 
so  (Luger  1013). 


A 

278       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

Luger  went  to  the  Department  of  Markets  and  spoke  to 
O'Malley  and  "  when  he  seen  me  he  was  fit  to  be  tied/'  (Luger 
1014). 

Luger  again  Appeals  to  his  Political  Club. 

Luger  went  to  the  Peter  J.  Dooling  Association  and  arranged 
to  meet  Mr.  Dooling,  who  was  to  go  with  him  to  the  Department 
of  Markets.  They  went  the  next  day  and  both  called  on  O'Malley 
(Luger  1015).  O'Malley  again  refused  to  do  anything  for  Luger 
(Luger  1015). 

Luger  appealed  to  Dooling  to  help  all  he  could  and  then  Dooling 
told  Luger  to  go  again  to  the  Department  of  Markets  with  his 
old  permit.  When  he  saw  O'Malley  he  was  told  by  O'Malley 
that  he  had  reconsidered  the  matter  and  the  transfers  were 
approved.  (Luger  1016). 

Luger  Secured  the  Permit  about  April  12,  1921. 

On  April  13th,  Lewis  drew  two  checks —  one  for  $500  and  the 
other  for  $300,  making  a  total  of  $800,  which  were  cashed  and 
with  an  additional  $200,  the  three  checks  amounted  to  $1,000-, 
all  of  which  was  given  to  Luger  (Luger  1019).  The  transfers 
were  effected  the  same  day  and  Luger  says  he  contributed  $500 
the  next  day  to  the  Irish  Fund,  of  which  Mr.  Burke,  the  club 
secretary,  was  treasurer  for  his  district  (10201).  Records  show 
that  of  a  total  of  $800  contributed  to  the  club  for  this  fund,  Luger 
is  credited  with  a  contribution  of  $500  (Luger  1022),  the  other 
contributions  being  in  nearly  all  cases,  one  dollar  each.  When 
first  examined  before  a  sub-committee  Luger  had  no  receipt  for 
his  contribution,  but  afterwards  obtained  one  dated  April  14, 
19'21  (Luger  1021).  This  receipt  was  the  last  in  the  book  from 
which  it  was  drawn,  the  book  bearing  the  name  of  a  person  other 
than  Burke,  who  signed  the  receipt,  and  many  receipt  books, 
admitted  to  have  been  received  from  the  central  office  of  the  Fund 
organization,  being  missing  or  destroyed. 

THE  MICHELS  —  TELEPHONE  COMPANY  CASE 
B.  Michels  Sons  Co.  Inc.,  is  the  holder  of  a  permit  for  stand 
11-R-22-R,  in  Washington  Market,  issued  July  1,  1919.  (H.  F. 
Michels  1081).  The  corporation  had  been  in  business  five  or  six 
years  and  prior  to  that  the  stands  had  for  a  great  many  years  been 
held  by  a  partnership  composed  of  same  people.  (Michel 
1081-82). 

The  Washington  Markets  stands  were  too  small  for  the  busi- 


REPOKT  OF  JOINT  LEGISLATIVE  COMMITTEE  279 

ness  so  that  the  corporation  rented  and  later  bought  the  building 
at  108  Vesey  Street.  The  purpose  of  buying  the  building  at  108 
Vesey  Street  was  not  to  resell  it,  but  to  use  it  as  a  storeroom, 
ice  box,  etc.,  for  the  business  (Michel  10*83). 

The  New  York  Telephone  Company,  through  its  agent,  wanted 
to  buy  the  Vesey  Street  building  and  Michel  referred  them  to  his 
real  estate  agent,  Mr.  Hibbard  (Michel  1084). 

Michel  told  Hibbard  that  he  would  rather  keep  the  building 
than  sell  for  $60,000  as  he  needed  it  for  business  purposes.  Also 
Michel  told  this  to  the  representative  of  the  telephone  company 
(Michel  1084).  This  occurred  about  one  month  after  Michel 
had  bought  the  building  (Michel  10-85). 

After  Michel's  refusal  to  sell  he  heard  that  O'Malley  wanted 
him  at  his  office,  for  an  interview.  Michel  went  to  O'Malley's 
office  and  the  Commissioner  asked  him  why  he  had  stands  in  the 
market  and  a  store  across  the  street  (Michel  1085).  Also  what 
right  did  Michel  have  to  a  stand  as  he  lived  in  New  Jersey  (Michel 
1086). 

Michel  had  read  and  knew  about  the  revocation  of  permits  for 
stands  in  the  markets. 

Second  Interview  with  O'Malley. 

The  next  day  Michel  took  his  agent,  Hibbard,  to  O'Malley's 
office.  At  first  O'Malley  wanted  to  talk  to  Michel  alone,  but 
Michel  insisted  on  Hibbard's  presence  and  he  was  called  in 
(Michel  1088).  Michel  told  O'Malley,  Hibbard  represented  him 
in  all  transactions  for  the  building  (Michel  1090).  Michel  had 
decided  he  must  sell  the  building  to  stay  in  the  market.  His 
testimony  is  as  follows: 

"  Q.  Had  you  told  Mr.  Hibbard  to  negotiate  for  the  sale  of 
this  building?  A.  Mr.  Hibbard  had  my  approval  of  that. 

Q.  Well,  what  made  you  change  your  mind  about  it.  I 
thought  you  didn't  want  to  sell  it  ?  A.  If  it  had  to  be  sold 
I  had  to  get  the  best  figure  I  could  get  for  it. 

Q.  Why  did  it  have  to  be  sold  ?  A.  Because  I  wanted  to 
stay  in  the  market. 

Q.  Because  you  wanted  to  stay  in  West  Washington 
Market?  Yes."  (Michel  1089). 

Telephone  Company  had  Done  O'Malley  "A  Great  Many  Favors/' 

At  the  second  interview,  November  17  or  18,  1920,  O'Malley 

said  to  Michel  and  Hibbard,  "  The  telephone  company  has  done 


A, 
280       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

me  a  great  many  favors  and  we  want  that  building.  We  got  to 
have  that  'building.77  Michel  then  left  and  Hibbard  remained 
along  with  O'Malley  (Michel  1092). 

The  contract  for  the  sale  of  the  property  by  Michel  to  telephone 
company  for  $45,000  was  made  January  7,  1921  (1093). 

On  January  7,  1921,  Michel  drew  check  for  $3,000  to  Cash  or 
J.  B.  Hibbard,  cashed  it  at  the  bank,  received  six  $500  bills,  which 
he  gave  to  Hibbard  as  his  commission.  (Michel  1094).  The 
deed  to  the  telephone  company  was  executed  on  January  31,  1921. 
(Michel  1095). 

Hibbard  on  November  18th,  accompanied  Michel  to  O'Malley's 
office.  First  Michel  went  in  alone;  then  Hibbard  was  called  in. 
Hibbard  told  O'Malley  that  if  he  wanted  to  talk  about  the  Vesey 
Street  building  he  did  not  need  Michel,  that  Hibbard  was  taking 
care  of  that  for  Michel  (Hibbard  1101).  Michel  then  went  out 
and  Hibbard  and  O'Malley  remained  alone.  (Hibbard  1102). 
The  testimony  is: 

"  Q.  What  did  you  say  to  Commissioner  O'Malley  ?  A.  I 
asked  him  —  he  told  me  that  he  was  under  obligations  to  the 
telephone  company;  they  had  done  a  great  many  favors  for 
him  and  they  had  asked  him  to  see  if  he  could  get  possession 
of  that  property  for  them. 

Q.  At  108  Vesey  Street  ?     A.  At  108  Vesey  Street. 
Q.  Did  he  say  who  it  was  representing  the  telephone  com- 
pany?    A.  Yes. 

Q.  Who?     A.  McHarg. 

Q.  Did  he  say  whether  or  not  he  had  previously  been  ac- 
quainted with  Mr.  McHarg  ?     A.  I  think  he  did  —  I  think 
he  said  McHarg  had  done  a  number  of  favors  for  him." 
(Hibbard  1102). 
Hibbard  Promises  O'Malley  Share  of  Commission. 

Hibbard  asked  O'Malley  if  he  intended  to  "  put  the  screws  on 
Michel"  about  his  market  stand  and  O'Malley  said  "No,"  but 
he  did  want  to  do  something  for  the  telephone  company ;  so  Hib- 
bard said,  "  We  will  make  the  telephone  company  pay  a  little  more 
money,  and  I  shall  charge  a.  little  more  commission  and  you  will 
get  your  share  of  it."  (Hibbard  1103).  Michel's  written  offer 
to  sell  the  property  for  $45,000  was  received  by  O'Malley. 

On  January  7th,  after  the  contract  for  the  sale  was  signed 
Hibbard  went  with  MicheLto  the  bank,  where  a  check  for  $3,000 
was  cashed  and  Hibbard  received  the  six  $500  bills  (Hibbard 
1104). 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  281 

Hibbard  Gives  0' Medley  $1,500. 

After  leaving  the  bank  Hibbard  walked  to  O'Malley's  office. 
The  testimony  is : 

"  Q.  Did  you  see  Mr.  O'Malley  ?    A.  I  did. 

Q.  What  took  place  in  that  conversation?  A.  I  simply 
to]d  him  that  we  had  signed  the  contracts  and  I  received  my 
commission  and  I  thought  he  was  entitled  to  three  of  the  six 
bills  I  showed  him. 

Q.  Did  you  give  them  to  him  ?     A.  I  did. 

Q.  Three  $500  bills?     A.  Yes,  sir. 

Q.  Anything  else  said  in  the  conversation?  A.  No,  we 
had  a  general  talk."  (Hibbard  1104-1105). 

O'Malley's  Testimony. 

Before  fleeing  from  the  witness  stand,  O'Malley  answered  some 
questions  in  relation  to  this  transaction  as  follows : 

"  Q.  Do  you  know  John  B.  Hibbard  ?    A.  Yes,  sir. 

Q.  Did  you  get  $1,500  from  him?     A.  No,  sir. 

Q.  Never  received  any  money  from  him?  A.  I  did  not 
receive  it.  (O'Malley  1179). 

Q.  Did  McHarg  ask  you  to  assist  the  telephone  company 
in  getting  property  at  108  Vesey  Street  ?  A.  Yes,  sir. 

Q.  Did  you  send  for  Michel  ?     A.  Yes,  sir. 

Q.  Did  you  advise  him  to  sell  the  property  ?  A.  I  told  him 
of  the  proposition. 

Q.  Did  you  get  from  Mr.  Michel  a  written  offer  to  sell  the 
property  for  $45,000?  A.  No,  sir. 

Q.  Didn't  you  give  it  to  McHarg?  A.  Yes,  sir,  I  didn't 
get  it  from  Michel. 

Q.  Did  you  get  it  from  Hibbard  ?     A.  Yes,  sir. 

Q.  You  gave  it  to  Mr.  McHarg?  A.  Yes,  sir,  I  called 
up  Mr.  McHarg  and  he  came  to  my  office  and  I  gave  it  to 
him."  (O'Malley  1180). 

O'Malley  further  testified  that  McHarg  told  him  he  wanted 
O'Malley  to  talk  to  Michel  about  the  building,  because  the  tele- 
phone company  had  been  unable  to  get  a  definite  offer  of  sale 
from  Michel  and  they  needed  the  property  to  complete  a  square 
b]ock  for  the  telephone  company  (O'Malley  1182).  O'Malley  told 
McHarg  "  I  will  find  out  from  him  (Michel)  if  I  can.  I  will 
send  for  him  and  ask  him  just  what  he  means  to  do  and  let  you 


A 

282       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 

know  if  that  will  help  you."  (O'Malley  118-3).  O'Malley  tes- 
tified McHarg  had  done  some  favors  for  him  and  that  he  had 
known  him  possibly  a  year  (O'Malley  1184).  O'Malley  admitted 
he  sent  for  Michel  to  come  to  his  office  and  then  talked  to  him 
about  the  Vesey  Street  property.  Michel  told  O'Malley  the  piece 
of  property  was  in  the  hands  of  his  agent  (O'Malley  1186),  and 
that  Michel  would  have  his  agent  see  O'Malley  about  the  matter 
(O'Malley  1187). 

MARKET  SUPERVISORS 

A  curious  sort  of  institution  established  by  the  market  adminis- 
tration was  that  of  "  Market  Supervisors."  To  reduce  the  cost 
of  food  to  the  people,  the  Board  of  Aldermen  was  induced  to 
establish  a  number  of  open  air  markets  for  pushcart  and  wagon 
peddlers  in  the  streets  of  the  city.  The  object  in  legally  estab- 
lishing the  markets,  many  of  which  had  previously  existed  on 
sufferance,  was  to  end  the  opportunity  for  petty  graft  alleged  to 
have  been  levied  by  policemen  and  others  upon  the  pretext  that 
the  hucksters  were  blocking  traffic  or  littering  the  streets.  The 
opportunity  of  the  legal  markets  was,  however,  seized  upon  to 
create  also  a  new  and  officially  sanctioned  kind  of  graft. 

The  aMarket  Supervisors "  are  not  city  officials  or  employees, 
being  in  no  class  of  the  civil  service  and  being  without  place  upon 
the  payroll.  They  have  been  appointed  by  the  Market  Depart- 
ment usually  on  the  nomination  of  a  Tammany  district  leader. 
Their  jurisdiction  is  to  approve  the  application  of  peddlers  who 
desire  places  in  the  markets  and  to  see  that  they  are  kept  clean. 
For  that  purpose  they  have  assistants  nominated  in  the  same  way. 
Their  compensation  comes  from  the  fee  of  $1  per  week  or  50  cents 
per  day,  which  they  in  person  collect  from  each  peddler  in  the 
market  and  keep  as  their  own,  except  for  disbursements  to  helpers. 
The  attendance  in  the  various  markets  varies  from  31  to  375 
peddlers  per  day.  The  alleged  expenses  of  the  supervisors  are 
subject  to  doubt,  but  in  any  event,  their  admitted  receipts  are 
substantial. 

The  vice  of  such  a  system  is  obvious.  The  admitted  graft  is 
bad  enough.  The  opportunity  for  additional  levy  is  clear  and  the 
absence  of  official  responsibility  invites  the  exploitation  of  such 
opportunity. 

Clearly,  if  such  markets  need  supervisors,  they  should  be 
regular  city  officials  or  employees  and  the  fee  paid  by  the  peddlers 
should  go  to  the  city. 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  283 

SALE  OF  ARMY  AND  NAVY  FOOD  SUPPLIES 

While  O'Malley  was  deputy  commissioner  of  Public  Markets 
under  Dr.  Day,  he  had  an  active  part  beginning  in  July,  1919,  in 
the  distribution  in  New  York  City  of  surplus  food  supplies  remain- 
ing in  the  possession  of  the  War  and  Navy  Departments  after  the 
Armistice.  The  purpose  of  the  Federal  Government  in  enabling 
these  foodstuffs  to  be  distributed  by  municipal  agents  was  to  place 
the  same  within  the  reach  of  the  general  public,  especially  the 
poor,  at  just  enough  over  the  low  prices  charged  by  the  govern- 
ment, to  pay  the  cost  of  distribution.  However,  under  the  scheme 
of  distribution  in  New  York,  in  which  O'Malley  had  a  very  im- 
portant part,  not  only  were  large  quantities  of  choice  foodstuffs 
made  available  to  high  priced  hotels  instead  of  to  the  public  gen- 
erally or  the  poor,  but  the  margin  of  profit  was  fixed  so  high  that 
on  the  handling  of  goods  costing  $2,831,183.26  there  was  a  gross 
profit  of  $796,199.94. 

That  enormous  gross  profit  has  never  been  fully  accounted  for 
and  $38,257.36  has  been  totally  unaccounted  for.  Of  the  balance, 
certain  items  of  expenditure  are  conspicuous.  Commissioner 
Day  and  Deputy  Commissioners  O'Malley,  Smith  and  Mulry  paid 
themselves  compensation  out  of  this  fund  at  the  rate  of  $20  a 
day,  to  the  total  sum  of  $7,340,  in  addition  to  their  regular  city 
salaries.  Hosts  of  city  employees,  policemen,  clerks  and  others, 
received  extra  compensation  from  the  fund  though  working  on 
city  time  and  receiving  their  regular  city  pay.  Trucking  charges 
amounted  to  $144,480.15,  large  portions  of  which  went  to  a 
political  friend  of  the  administration  and  to  a  neighbor  of 
O'Malley 's  without  competition  and  at  rates  that  allowed  them 
a  profit  on  trucks  hired  by  them,  which  the  administration  could 
have  hired  at  the  same  rates  as  the  favored  contractors.  The 
latter's  profits  ranged  as  high  as  $6  per  day  per  truck.  Three 
hundred  thousand  dollars  of  the  surplus  was  turned  over  to  a 
Special  Committee  for  charitable  purposes,  but  $50,000  of  that 
amount  was  later  paid  to  persons,  whom  the  administration  had 
loudly  proclaimed  to  be  volunteer  workers  during  the  distribution 
and  whom  the  Commissioner  of  Accounts  had,  after  investigating, 
savagely  denounced,  as  seeking  pay  to  which  they  were  not  enti- 
tled. Altogether,  here,  as  in  the  routine  administration  of  the 
Market  Department,  the  touch  of  its  officials  was  attended  by  the 
taint  of  incompetence,  waste,  favoritism  and  corruption. 


284       INVESTIGATION  OF  AFFAIRS  OF  NEW  YORK  CITY 


DEPARTMENT     OF     PUBLIC     WELFARE  —  KINGS 
COUNTY  HOSPITAL  JOB 

An  illuminating  example  of  the  futility  of  law  and  ordinance 
to  compel  an  honest  and  efficient  administration  of  government 
is  disclosed  by  the  Committee's  investigation  of  the  conspiracy  to 
defraud  the  city  in  connection  with  the  proposed  installation  of 
an  oil  burning  heating  and  power  plant  in  the  Kings  County  Hos- 
pital under  the  jurisdiction  of  the  Department  of  Public  Welfare 
(formerly  the  Department  of  Public  Charities).  There  is  every 
reason  to  believe  that  the  conspiracy  would  have  been  successful 
but  for  the  committee's  exposure  of  the  facts.  Alderman  Charles 
A.  McManus  and  his  brother,  former  Senator  Thomas  J.  Mc- 
Manus,  were  the  persons  with  "  influence/'  for  which  they  were 
to  be  paid,  sufficient  to  circumvent  the  law  as  to  competition  for 
public  work.  A  "  shoe  string  "  company  was  to  get  the  contract 
at  a  profit  of  over  100  per  cent  and  "  competition  "  was  to  be 
"encouraged"  by  the  official  use  of  plans  and  specifications 
formulated  by  the  insiders.  Even  then  if  competition  became 
dangerous,  the  insiders  were  to  be  pre^advised  of  the  bid  which 
must  be  met. 

The  testimony  upon  the  subject  shows  the  following:  In  May. 
1921,  Irving  Cohn,  Dr.  Gustavo  New  and  Edward  A.  Pierce 
started  in  the  oil  burning  installation  business  under  the  name  of 
"  Terminal  Engineering  Company."  Pierce  and  Cohn  had  no 
previous  experience  in  oil  burning  installations.  Kings  County 
Hospital  was  the  first  public  building  in  which  the  new  concern 
became  interested. 

During  the  war,  Dr.  New,  who  is  an  engineer,  had  charge  of 
inspecting  steel  mills  all  over  the  United  States  and  installing  oil 
burning  systems  in  furnaces.  He  became  acquainted  with  Pierce 
in  January,  1921,  and  rented  desk  room  in  his  suite  of  offices, 
from  which  he  endeavored  to  secure  contracts  to  install  oil  burn- 
ing heat  and  power  plants.  Pierce  proposed  that  they  go  into 
business  together,  taking  a  third  man,  Cohn,  in  with  them. 

Pierce  took  up  the  question  of  getting  an  introduction  to  Com- 
missioner Coler  with  Senator  McManus.  McManus  became  asso- 
ciated with  Pierce  in  the  business.  He  became  financially  inter- 
ested in  the  matter  by  an -agreement  dated  July  29,  1921,  among 
Pierce,  Alexander,  Cohn  and  McManus.  They  agreed  to  form  a 
corporation  which  was  to  be  called  the  "  Oil  Burning  Installation 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  285 

Company."  McManus  was  to  get  24%  per  cent  of  the  stock  with- 
out paying  anything  for  it.  He  was  to  use  his  influence  to  intro- 
duce them  to  men  who  would  consider  burning  oil,  particularly  in 
public  buildings. 

Pierce  and  Cohn  had  called  upon  Coler  concerning  installing 
a  plant  in  the  Kings  County  Hospital.  Senator  McManus  also 
went  to  see  Coler  about  it. 

Early  in  1918  the  Department  of  Public  Welfare  had  looked 
into  oil  burning  and  had  decided  it  was  too  expensive.  The  Mc- 
Manus group  brought  the  Singer  Building  plant  to  Mr.  Coler's 
attention.  He  inspected  it  with  them  and  concluded  that  it 
embodied  the  best  means  for  any  hospital  to  get  rid  of  dust  and 
dirt.  Having  written  his  decision  as  to  policy  he  then  turned  the 
matter  over  to  his  engineers  to  estimate  the  cost.  A  verbal  report 
was  submitted  by  Chief  Engineer  Herrick. 

The  Terminal  Engineering  Company  was  permitted  to  study 
the  feasability  of  installing  such  a  plant  in  the  Kings  County 
Hospital.  Senator  McManus  at  Pierce's  request  took  up  with 
Mr.  Coler  the  matter  of  having  Dr.  New  examine  the  Hospital 
plant,  with  a  view  to  making  an  oil  installation. 

On  May  19,  19-21,  the  Terminal  Engineering  Company  wrote 
that  it  would  install  a  plant  in  the  Kings  County  Hospital  for 
$47,500. 

New  had  suggested  $35,000  or  $38,000  as  the  price.  Pierce 
and  Cohn  said  that  was  too  low,  because  they  would  have  to  take 
care  of  the  "  people  who  were  going  to  help  us  bring  the  job  off.'7 

The  company  again  wrote  Mr.  Coler  on  June  2nd,  and  June  6, 
1921. 

Coler  testifies  that  he  did  not  know  that  Buxton,  the  engineer 
who  had  shown  him  the  Singer  Building  plant,  was  interested  in 
the  Terminal  Engineering  Company.  As  a  matter  of  fact  he  was 
to  receive  5  per  cent  of  the  profits.  Buxton  made  a  favorable  re- 
port to  Mr.  Coler  concerning  the  Kings  County  Hospital  plan 
which  report  was  enclosed  with  the  letter  of  June  2nd  from  the 
Terminal  Co.  A  blue  print,  showing  the  proposed  layout,  was 
submited  with  the  letter  of  June  6th. 

The  department  took  the  blue  prints  furnished  by  the  Terminal 
Engineering  Company  and  filed  these  identical  blue  prints  with 
the  Fire  Department.  The  specifications  were  partly  drawn  in 
the  office  of  the  Terminal  Engineering  Company.  All  the  speci- 
fications for  the  Kings  County  Hospital  job  were  typewritten  in 


286       INVESTIGATION  OF  AFFAIES  OF  NEW  YORK  CITY 

the  office  of  the  Terminal  Engineering  Company  and  Chief  Engi- 
neer Herrick's  name  was  placed  on  the  first  page. 

The  company  again  wrote  the  Department  on  June  23rd,  this 
time  addressing  Deputy  Commissioner  McStay  and  offering  this 
time  to  install  the  system  for  $62,500'.  A  skilled  engineer  exam- 
ining the  blue  print  of  the  proposed  lay-out,  sent  with  the  letter 
of  June  6th,  would  have  known  that  the  price  of  $62,500  was  about 
$25,000  too  much.  For  this  amount  Mr.  Coler  applied  to  the 
Board  of  Aldermen  for  Special  Revenue  Bonds.  He  could  not 
explain  why  the  amount  was  raised  from  $47,500  but  said  he  took 
his  engineer's  judgment  on  that. 

Pierce  calculated  that  the  installation  at  the  Kings  County  Hos- 
pital would  cost  the  Terminal  Engineering  Company  about 
$40,000.  Dr.  New  figured  it  at  $30,000.  One  of  the  "pros- 
pects "  listed  to  be  turned  over  by  the  Terminal  Engineering 
Company  to  the  Oil  Burning  Installation  Company  upon  its 
organization  was  the  Kings  County  Hospital  plant.  The  memo- 
randum read  "  approximate  contract  price  $62,500 ;  approxi- 
mate cost  $26,000;  approximate  profit  $36,500." 

Deputy  Commissioner  McStay  testified  that  the  first  estimate 
was  based  on  tanks  for  36,000  gallons  and  that  then  it  was  found 
that  it  required  another  tank  in  order  to  have  a  surplus.  How- 
ever, there  was  no  explanation  of  this  in  any  of  the  correspon- 
dence. Pierce  endeavored  to  explain  the  matter  in  another  way. 
He  testified  that  after  the  $47,500  bid  the  tanks  as  planned  were 
enlarged  to  12  ft.  by  44  ft.  though  not  increasing  the  number. 
But  Dr.  New  testified  that  what  really  happened  was  this : 

The  day  before  New  wrote  the  letter  of  June  23rd  and  while 
getting  ready  to  dictate  to  ex-Senator  McManus,  Cohn,  Pierce  and 
Staley  were  in  Pierce7  s  inner  office.  Pierce  and  Cohn  told  New 
to  make  the  price  higher  than  $47,500.  New  objected.  Cohn  said 
to  put  in  $62,500.  Pierce  showed  New  a  piece  of  paper  which 
New  had  just  before  seen  in  McManus7  hands.  Pierce  said, 
"  You  see  here  is  a  list  of  what  we  have  to  give  for  graft."  On 
the  paper  was  written : 

Me  2 $10,000 

B 3,000 

T.  S.  &  E.  Co 3,000 

K 200  (or  $1200). 

Murph 300 

St    1,500 


REPORT  OF  JOINT  LEGISLATIVE  COMMITTEE  287 

Pierce  said  "  Me  2  "  stood  for  the  two  McManuses  and  that 
"  B  "  was  some  Tammany  Hall  man.  The  slip  was  passed  around 
the  table  and  came  to  New  and  he  retained  it. 

On  June  29,  1921  Coler  wrote  the  Board  of  Aldermen  request- 
ing authorization  of  $62,500  of  Special  Revenue  Bonds  for  in- 
stalling an  oil  fuel  system  under  the  boilers  in  the  powerhouse 
of  Kings  County  Hospital.  He  wished  to  extend  this  service  to 
the  various  institutions  of  the  deparment,  particularly  those  on 
Randall's  Island.  The  letter  was  dictated  by  Herrick,  who  is 
Chief  Engineer  of  the  department.  The  enumeration  of  ad- 
vantages therein  was  substantially  the  same  as  those  set  forth  in 
Mr.  Buxton's  report  attached  to  the  letter  of  June  2nd,  1921  from 
Terminal  Engineering  Company  to  Coler. 

The  City  Record  of  July  14th  shows  that  Alderman  McManus 
offered  a  resolution,  which  was  made  a  special  order  for  the  day, 
to  the  effect  that  the  request  previously  received  from  Commis- 
sioner Coler,  dated  June  28,  1921,  be  granted.  The  resolution 
was  unanimously  passed.  At  this  meeting,  beside  Alderman  Mc- 
Manus, ex-Senator  McManus,  McStay,  Coler,  Buxton,  New  and 
Pierce  were  present. 

Alderman  McManus  had  previously  helped  with  the  name  of  the 
new  company.  Pierce  had  met  the  Alderman  shortly  after  he 
met  the  Senator.  The  Alderman  was  in  Albany  when  the  in- 
corporation papers  were  to  be  submitted  to  the  Secretary  of  State. 
Pierce  talked  with  him  over  the  phone  and  also  wrote  him  about 
submitting  a  list  of  alternative  names  to  the  Secretary  of  State. 
The  letter  ended,  "  Hop  to  it  old  kid  and  let  us  have  some  action." 
After  the  vote  of  the  Aldermen,  Pierce  wired  his  brother-in-law 
"  Contract  closed  satisfactorily." 

The  next  day,  after  the  Aldermanic  vote,  Amos  T.  Smith,  an 
engineer  in  the  office  of  Secretary  of  the  Board  of  Estimate,  called 
Dr.  New  up  and  said  he  wanted  to  see  him.  He  said,  "  How  did 
you  arrive  at  $62,500  "  ?  At  that  point  Mr.  Pierce  took  up  the 
conversation.  A  few  days  later  New,  Pierce,  Staley  and  Buxton 
all  went  to  see  Smith  by  appointment.  Buxton  and  Smith 
went  over  the  whole  matter.  New  tried  to  speak  but  Pierce 
signalled  to  him  to  keep  quiet  and  himself  got  into  an  argument 
with  Smith  and  Smith  said,  "  You  are  talking  a  lot  of  bull." 
New  later  heard  them  ask  who  Smith  was  and  what  could  be  done 
to  make  him  keep  quiet. 

The  request  for  Special  Revenue  bonds  had  been  referred  to 


•*, 

288       INVESTIGATION  OF  AFFAIES  OF  NEW  YORK  CITY 

Smith  for  advice  to  the  Board  of  Estimate,  while  he  was  away 
on  vacation.  On  his  return  he  took  the  matter. up,  but  he  never 
made  a  report  011  it.  Nevertheless  the  Board  of  Estimate  took 
final  action  approving  the  application  even  though  the  Committee 
on  Finance  and  Budget,  to  which  the  matter  had  been  referred, 
had  submitted  no  report. 

Pierce  wrote  New  on  August  6th,  "  I  am  preparing  all  of  the 
specifications  and  blue  prints  for  the  city  job  and  they  are  in  turn 
going  to  establish  my  specifications  and  drawings  which  are  the 
tracings  themseives  as  their  own,  or  in  other  words  as  though  they 
had  originated,  them  and  not  us.'7 

Pierce  attempted  to  tear  up  the  following  letter  of  August  5th 
when  it  was  subpoenaed.  It  was  addressed  to  his  brother-in-law 
and  read  in  part :  "  We  applied  for  a  closed  letting  but  were 
not  successful  therefore,  it  is  necessary  that  specifica- 

tions and  blue  prints  be  drawn  in  order  that  all  can 

figure  on  the  job  *  *  *.  Regardless  of  what  their  figure  is, 
our  price  will  be  the  lowest  as  we  will  be  pre-ad vised." 

On  August  26th,  1921  Coler  submitted  specifications  for  the 
Kings  County  Hospital  oil  burning  plant  to  the  Bureau  of  Build- 
ings for  their  approval.  On  September  9th  he  wrote  to  them, 
"  It  is  my  wish  to  have  this  installation  begun  as  quickly  as  pos- 
sible." This  letter  (and  presumably  the  previous  one)  was  sent 
to  the  Manhattan  Bureau  instead  of  the  Brooklyn  one.  On  Sep- 
tember 19th  the  Acting  First  Deputy  Commissioner  of  his  de- 
partment wrote  the  Brooklyn  Bureau  forwarding  to  them  dupli- 
cate specifications  for  the  Kings  County  Hospital  installation. 
There  was  some  delay  due  to  somebody  losing  the  duplicate  plans. 
On  September  30th  a  letter  was  again  sent  to  the  Brooklyn  Bureau 
saying  "  Commissioner  Coler  is  very  anxious  that  this  installation 
be  begun  before  the  end  of  the  year."  Again  on  October  4th  the 
First  Deputy  Commissioner  wrote  calling  attention  to  the  fact 
that  the  appropriation  would  lapse  unless  the  matter  was  ex- 
pedited, as  it  still  had  to  go  to  the  Bureau  of  Fire  Prevention, 
the  Mayor  and  the  Board  of  Estimate.  Finally  on  October  4th 
the  department  was  notified  that  the  plans  had  been  approved. 
At  this  point  the  Committee's  interest  in  the  matter  terminated 
it.  Pierce  and  his  Oil  Burning  Installation  Company  have  dis- 
appeared. 


YC  36270 


